Management Economics 2: Analyzing Apple's Market Structure

Management Economics 2

Table of Contents
Management Economics 2.....................................................................................................1
Table of Contents.............................................................................................................................2
Description of Apple..............................................................................................................3
Analyse the market..........................................................................................................................3
Different market structure................................................................................................................5
Did the company operate in a different market structure?...............................................................7
REFERENCES..............................................................................................................................10

Description of Apple
Apple Inc. is an American multinational technology which basically deals in computer
software, consumer electronics as well as online services. This is known as the world’s largest
technology company (Acquavia and et. al., 2021). The founder of this company is Steve Jobs,
Ronald Wayne and Steve Wozniak. This company designs and manufactures different personal
computers, smartphones, wearables, tablets and accessories. iPad, iPhone, Mac are the most
popular products of Apple. iPhone is the line of smartphone for this company. It is based upon
iOS operating system. Another product Mac is known as line of personal computers based upon
Mac OS operating system. Other products of this company include purpose tablets which
depends upon iPad OS operating system. Apple TV, Airpods, Apple Watch, Home Pod, etc. The
services provided by Apple are Cloud services, Applecare, Advertising, Payment services,
Digital content, etc. The customers of Apple are basically small, mod sized business, enterprise,
education and government markets. In the year 2018, Apple has made history by becoming one
of the first company that is having publicity trading valued 1 trillion dollars. According to the
first quarter of 2020, it was seen that there was revenue between 85-89 billion dollars. Services
offered by Apple is led by Apple Music and App store. The iPhone business has accounted for
60% of total sales in the year 2019. There is growth in Apple’s services. The home, wearables
and accessories segment consists of 9.4% sales. iPad has accounted for 8% sales this year.
Personal computers of Apple have been built around Mac and these have generated sales of
approximately 30 million dollars.
Analyse the market
There are different varieties of market structure systems in market economies. These depend
upon companies and industries. It is very essential for small businesses to operate n feasible type
of market structure (Breen and et. al., 2016). It specifies the way of production and pricing
decision. This helps to determine whether there is need to enter or leave the industry. basically,
there are five types of market structure which are mentioned below –
Perfect competition – This type of market structure is characterised by sellers and buyers. In
context of classical theory, it is seen that perfect competition exists in market structure where
there are infinite number of sellers and buyers. There is less possibility of one participant to alter

prevailing price in this type of competition. If they are able to do so then sellers and buyers are
having infinite alternatives for pursuing.
Monopoly – This is a type of market structure which is exact opposite of perfect competition.
There is only one producer of specific service or product and there is no substitution of the
product (Eklund, 2017). A monopolist is allowed to charge price according to own choice as
there is no competition. The limitation for this type of market structure is that the overall revenue
is limited by willingness or ability of customers to pay the price or amount.
Oligopoly – In context of oligopoly, it is considered that it is similar to monopoly. The main
difference in oligopoly is that rather than having only one producer of product or service. There
are lot of producers which are making up for dominant majority regarding production within
market system. On the other hand, oligopolists are not having same pricing power.
Monopolistic competition - This is known as type of market structure that consists of different
elements of monopoly. In context of perfect competitive market system, a lot of competition is
present within market. There is difference which is differentiated from others. It concludes that
there is great price than perfect competitive company. An example of this market structure is
music.
Monopsony with one buyer – Market structure is differentiated by number of supplier within
market. There are infinite number of sellers and buyers within perfectly competition (Getahun
and et. al., 2017).
In context of Apple, it is considered as oligopoly and monopolistic competition. Apple Inc. is
maintaining oligopoly market structure in reference to smart phone competition. Apple Inc. is
known to be monopolistic competition in branded computers. As monopolistic competition is
defined as market in which sellers are producing highly differentiated products. This provides
description of demand side that is parallel and on supply side there is monopolistic competition.
There are several economists who have stated that monopolistic competition is more realistic as
compared to the perfect competition. Apple Inc. is selling un-identical technology and it enables
to sustain in market efficiently. There are more competitors in monopolistic competition than
oligopolistic. That is why Apple’s super tablet computer is known to be monopolistic one. There
are different branded computer organisations like HTC, Dell, Samsung and these are known to
be competitors within mobile industry. The sales revenue which is generated by Apple is close to
these competitors.