According to Wikipedia, price elasticity of demand is defined as the responsiveness of the quantity demanded of a good or service to a change in its price. Demand for a product can be said to be very inelastic if consumers will pay almost any price for the product, while demand for a product may be elastic if consumers will only pay a certain price, or a narrow range of prices, for the product. Inelastic demand means a producer can raise prices without much hurting demand for its product, and elastic demand means that consumers are sensitive to the price at which a product is sold and will not buy it if the price rises by what they consider too much.

Drinking water is a good example of a good that has inelastic characteristics – in that people will pay anything for it. On the other hand, demand for sugar is very elastic because as the price of sugar increases there are many substitutions, which consumers may switch to.

Apple, a name always mentioned the most in IT world. From ancient times to the Apple iPhone’s time now. With personal experience (the iPod has been broken and his second cousin Mac used to broken-down broken.) is really very curious about the success of Apple.

Let start with the first Iphone 2g

The first iphone was launched on June 29, 2007. The early Iphone is a product and creative breakthroughs. On the other side, it is also expensive toys. Even too expensive. With the price $599 and $699 for the 4GB and 8 GB versions, the public view as long as the Iphone is quite limited. However it looks like Steve Jobs also soon realize this. Evidence is less than 2 months after the release date; Apple has suddenly reduced 8GB price down to $399, alsoannounced to stop producing 4GB version. At this point, the Iphone’s reputation has spread wider. Price is cheaper than the amount consumed should be improved significantly.

Move on to Iphone 3g

Apple store also realize their problems with the first iphone and now they produce a new one 3G.

At this time the Iphone price has reduced, for iphone 3g the 8GB version will sale only $199, with a third compared with 4GB version year ago. And who needs a larger store would have to spend $299 to own 16Gb version. Clearly, the new price attractive and more popular. It will make the Iphone more attractive unprecedented in the eyes of users, especially when economic conditions are quite overcast like today.

A year later, upgrade to the 3G demands becomes more urgent, as the increasingly dense web graphics and multimedia content. According to Apple ads, iphone 3G speeds page load 2.8 times faster than before. And moreover the new iphone will not “paste special” at US just like before, users in Europe, Asia, will also open more than pleased with this product.

Reason not to buy iphone

Iphone 3G still tightly tied to AT&T: to purchase the iphone 3G users must use contracted network services of AT&T from 2 consecutive years or more. And the iphone 3G is only compatible only with AT&T Iphone 3G more expensive than the $199: 199USD price advertising for iphone 3G is really only imagining price for the user. That price applies only to those who accept contracted service with AT&T. Integrated whole, the price of the iphone 3G could sell up to 699 USD for the right price version of the iphone 3G unlock. Totally, the iphone 3G only cheap but not cheap for immediate long term. This can be considered a smart phone and high top expensive.