a new iphone is released which has 32gb memory as opposed to the old one which had 16gb. If the price of both models are the same what would happen to the market of the old model? What would happen if the new one was more expensive?
A- in the first scenario the 16gb would drop in price.
b- In the second the price would remian the same to fool consumers into believing that they are getting a bargain.
Typical Business Practise
Well yes, there would be some saps who pay full price fot the 16gb. However, I believe most consumers are savy enough to recognize the difference. So, the quantity of 16gb models sold would certainly drop by a bunch.
If a new iPhone is released with double the memory capacity (32GB compared to the previous 16GB) and both models are sold at the same price, it would generally have a negative impact on the market for the old model. Here's why:
1. Increased Value: The new iPhone with 32GB would be seen as offering more value for the same price. Customers are likely to prefer the newer model that provides double the storage capacity. As a result, the demand for the old model would decrease.
2. Obsolescence: Technology advancements often render older models obsolete. The increased memory in the new iPhone may come with other improvements as well, such as a faster processor or better camera. These added features could make the older model less desirable.
3. Competitive Disadvantage: With the release of the new model, the focus of marketing and promotion will likely shift towards the newer version. This can lead to decreased awareness and visibility for the older model, further reducing its market presence.
Now, let's consider the scenario where the new iPhone with 32GB memory is priced higher than the old model:
1. Limited Impact on the Market: If the new iPhone is more expensive, it may not directly impact the market for the old model as drastically. Some customers may still prefer the older model due to its lower price, even though it has half the memory. The impact on the market will depend on the price difference, demand for higher memory, and the perceived value of other new features.
2. Potential Upselling: Apple may use the increased memory as a premium feature to justify the higher price of the new model. Customers who value having more storage space may be willing to pay the extra cost to upgrade. This could potentially increase the overall revenue for Apple, while still maintaining some demand for the older model.
It's important to note that individual preferences, budget considerations, and specific market conditions can also influence the outcomes described above.