Economic Analysis of Foldable Smartphones and Consumer Preferences

This report provides an economic analysis of foldable smartphones, examining consumer preferences and market dynamics. It discusses how companies disseminate knowledge about the product to different consumer groups and determine consumer preferences through market surveys. The analysis considers factors such as pricing, consumer behavior theories, and budget constraints to estimate the number of consumers expected to purchase foldable phones. The report concludes that foldable smartphones currently occupy a niche market due to their high price and limited perceived utility compared to other high-end smartphones. It suggests that reducing the price and collaborating with telecom companies could increase sales volume in the future. Desklib provides access to this report and other solved assignments for students.

ECONOMIC ANALYSIS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1) How the companies will disseminate knowledge regarding different consumer groups the
new product will appeal to?.........................................................................................................1
2) How the companies will determine consumer preferences?...................................................1
The number of consumers expected to purchase the phones.......................................................2
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
With the rising technological advancements, a new set of innovation is witnessing in
different field as part of addressing or developing market needs. In this respect, a foldable phone
is a recent innovation in the smartphone market that aims to boost the declining sale of the
sector. However, it has a high price and aims to operate in a niche market only. With this
scenario, the present report focuses on conducting an economic analysis of the foldable
smartphones and consumer market.
1) How will the companies disseminate knowledge regarding different consumer groups the new
product will appeal to?
From the article, it is evident that foldable smartphone comes with a handy price, and
hence it will not attract a large customer base and instead will focus on developing a small
market for the same. However, another reason for keeping this market small deliberately is that
foldable phones don’t prove its increased utility against the other high-end smartphone. Also, it
is relatively expensive that most of the high-end devices available in the market presently
(Strumpf and Germano, 2019). Besides this, as per the theory of consumer behaviour, consumers
will opt for a better and more reliable option than that of foldable devices. Also, this particular
technology is new in the market and hence lacks consumer acceptance. However, it will attract
consumers who are technology freak and aims to buy every new device been launched in the
market. Also, their key purpose is not to use the device for longer but rather aim to test the
durability of foldable phones from different aspect and also aim to compare its performance.
In addition to it, the consumer has a range of choices in terms of smartphones, and hence
the majority of them will opt for another high-end device of Apple, Samsung, or Huawei and not
foldable smartphones. This is so because the foldable device is highly expensive and doesn’t
offer any advanced utility as compared to other devices available in the market. Besides this, the
budget constraint will be of key concern for consumers who are planning to buy this new device
(Thaler and Ganser, 2015). Upon comparing price and features, they will find foldable
smartphones are not very appealing and hence will attract less consumer.
2) How will the companies determine consumer preferences?
As part of assessing consumer preferences, it is required to conduct the market survey by
considering varied factor. A key focus of the survey will be to identify the preferences of
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consumers in terms of products and the amount of income been spending. Based on it, consumer
behaviour can be assessed and hence they can be market for foldable smartphones. However, to
conduct the survey, it is required to reach to only those consumers who are planning to switch
their old smartphones. They can be tracked from the online shopping platform or while visiting
physical stores selling smartphones. The survey will support in identifying the budget of the
consumer for buying new smartphone and factors they are looking in the new phone. For
example, the below graph signifies the response of 100 research participant on the budget they
have for new smartphones:
Below $500 $500-$1000 $1000-$1500 $1500-$2000 Above $2000
12
19
38
22
9
Budget For New SmartPhone
Based on this, it is evident that there are only 9 out of 100 people who have a budget of
more than AUD 2000 for new smartphones. Besides this, around 38 out of 100 potential buyers
have a budget of AUD 1000 to 1500 only. Hence, for this buyers, budget constraint theory will
work significantly, and hence they will opt for other budget smartphones than that of a foldable
smartphone. From the survey, key information of consumer preference will attain that aids in
developing sound marketing and pricing strategy. However, the prices are deliberately kept
higher for the foldable smartphone as it aims to develop a niche and also to influence consumers
to replace the older phone with other available smartphone. Hence, consumer preferences can be
best known with the help of survey techniques, and the same can be taken into account by
companies that developing foldable smartphone as part of meeting the preference of consumers.
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The number of consumers expected to purchase the phones
By reviewing the above discussion and article, it can be stated that foldable smartphone
will work as a niche market only and will not be able to replace the market of a high-end
smartphone. This is so because the foldable phone has a high price tag and has almost the same
features which will be preferred less by the buyer. Also, more competent and advanced feature
smartphone is available in the market which will certainly cater to the attention of buyers, and
overall sale of the foldable phone will be less. In addition to it, budget constraint theory will also
affect the sale of foldable devices. It is evident that majority of consumers will not do not have a
budget to buy such expensive smartphone and therefore it will be complex for companies to sell
such device to the target market (Camerer, Loewenstein and Rabin, 2011). However, the
launching of new technology smartphone will boost the brand image of a company like Samsung
and Huawei as its products will be perceived as technologically advanced by the buyers. Due to
this, sale of its other device will certainly increase in future as well and hence can able to capture
large market share.
Besides this, it is required that the price of foldable smartphone must be reduced in the
near future as part of increasing its sale volume. Presently, both companies can sell their foldable
smartphone in tie-up with Telecom Company by making lucrative deals. From this, overall sales
volume can be increased in the short run, and hence more response will attain in the near future.
Another reason for low sale can be no availability of review of such technology, and therefore
buyers will not be confident in such devices (Huitema, 2012). Hence based on the above factors,
it can be stated that there will be very less number of consumers who will be buying the foldable
phones.
CONCLUSION
From this analysis, it is evident that foldable smartphone has a very nascent market in the
initial years, but it can gradually increase with time. However, it is required to reduce the price of
such a device in the near future as part of boosting the overall sale of the smartphone market and
also to influence the buyer to go for foldable smartphones.
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REFERENCES
Camerer, C.F., Loewenstein, G. and Rabin, M., 2011. Advances in behavioral economics.
London: Princeton university press.
Huitema, E., 2012. The future of displays is foldable. Information Display, 28(2-3), pp.6-10.
Strumpf, D. and Germano, S., 2019. The $2,000 Bendable Phone: Hold ’Em or Fold Em?
[Online]. Available through: < https://www.wsj.com/articles/smartphone-makers-gamble-that-
they-know-when-to-fold-em-11551701247>. [Acessed on 3rd May 2019].
Thaler, R.H. and Ganser, L.J., 2015. Misbehaving: The making of behavioural economics. New
York: WW Norton.
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