Edited by Sam Eisen
There are two long lines that are distinctive in American society today: the line that consists of 12.5 million unemployed people and people with broken 401K plans waiting for the Federal Government’s assistance, and the line of 5 million people who recently purchased the newest Apple release, the iPhone 5, over one weekend.
With such a high number of people in need of financial aid and assistance, it is curious to think how so many people can afford to buy the latest technological release at a bank-breaking minimum of $649 without a contract for a 16GB version. The 64GB version, the largest amount of memory offered in the newest iPhone, retails at over $800. The 5 million smartphones sold during the iPhone 5’s opening weekend is a record number, but most surprising is the fact that these numbers do not meet the projected sales of Wall Street analysts. One analyst made a projection of up to 10 million smartphones being sold. With numbers like this America should be thankful, because this technological craze is putting money back into the economy.
Panos Mourdoukoutas from Forbes attributes this desire for the latest and greatest technology to what is called a consumer craze.) In a society driven by commercial products, it became normal for people to desire the newest technologies. When emotion is brought into the selling campaign for these technologies, however, that is when it becomes a craze. “WOM [word of mouth] and buzz are sensitive to marketing campaigns that begin with consumer needs and desires, come up with an innovative product or service offer, target the right group, create the right message, find the right social context, the right ‘conditions’ and ‘circumstances’ to spread the message, and turn WOM into buzz by adding emotion to hype the campaign—often creating a consumer craze.” The iPhone becomes an iWant, and later an iPurchased. Consumers listen to the hype that says the newest edition of the smartphone will add a value to their lives, unlike the older versions.
The iPhone was first released in 2007. During its third quarter, only 270,000 smartphones worldwide were sold. Five years later, Apple is looking at upwards of 37 million smartphones sold in a fiscal quarter. With numbers like this, it seems Apple is becoming a monopoly. They are driving out the competition of Samsung and HTC. Apple holds the largest share of sales among manufacturers, 34%, while Samsung trails behind at 17%. HTC is just behind Samsung.
Steve Jobs swore that he would spend as much of Apple’s considerable wealth as he pleased to shut down Google. Jobs had no desire of in licensing to Google’s partners based on his belief that fellow Apple board member Eric Schmidt leaked iPhone’s critical features to the competition. Google’s strong presence in the market (by way of Samsung and HTC) offers them a high mobility. It is likely that Apple can succeed in gaining a high market over Google, seeing that Samsung is lagging at 17%.
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