Week One


An Economic Perspective on Apple Inc.
Mervin Gabon, Marissa Estaya, Stefan Bachrach 
University of Phoenix 
ECO 561: Economics 
Group CC09MBA01 
Matthew Mulyanto 
October 27, 2009

    This research will discuss three alternative economic futures for Apple in the economy over the next 5 years. It will also explained the likelihood of the economic futures occurring. We recommend an appropriate course for Apple to make business decisions based on the projected economy’s stage in the business cycle and the projected macro economic condition. We also explain the evidence that supports our recommendations and how the recommendations might need to be modified for the alternative economic futures.
The Competition
The first alternative economic future to consider is the hypothetical situation that Microsoft takes advantage of its huge market share to completely wipe out Apple in the computer industry. With antitrust laws in effect to protect against monopolistic tendencies, Microsoft cannot simply manipulate its prices to drive away the demands of Apple’s products. However, in the event that Microsoft or Linux based operating systems have come to par with its reliability and performance with Apple’s products and that these competitors are exempt from antitrust laws to further push industry competition, we believe that if the competition increases its supply and quality, while decreasing its prices, Apple could face a bleak economic future in trying to remain a relevant competitor in the computer industry.
As previously argued, we believe that Apple’s products resemble inelastic tendencies and that because of its superior quality, Apple can be seen as a premier niche in the computer industry. It is because of these inelastic tendencies that Apple can successfully price its products well above the competitor average while not compromising demand. Alternatively, and to justify...