preview

Business Research On Pricing Of Mobile Phones And Their Future

Good Essays

BUSINESS RESEARCH ON PRICING OF MOBILE PHONES AND THEIR FUTURE <15th Dec 2014> Table of Contents Abstract 3 Introduction 3 Total factor productivity 3 GDP 4 Economic Growth 5 Inflation 7 Sales rates 8 Exchange rates 9 Fares of Fixed Telephony Increased 10 Global Market of mobile phones 12 Conclusion 14 REFERENCES 15 Abstract: The prices of mobile phones have reduced critically over the decades. Economists predict that if the same situation continues the mobile phones will be even more affordable and indirectly will increase the supply tremendously, and which would include larger sections of the world in imminent future. This article clearly defines how the cost of …show more content…

Total factor productivity These are the variables the GDP and Total Factor productivity vary upon. GDP= Total factor productivity .f (Capital, Labour...) TFP= g (Mobile penetration) Increase in the Total factor productivity indirectly means better utilization of the resources such as capital and the labour (Muto and Yamano, 2009). This indirectly means a good GDP value of the country because of its productiveness. This Total factor productivity has an indirect impact on the country’s GDP. According to a analysis done by Deloitte[1] the graph is plotted in Figure 1. Figure 1. Effect of 10% increase in mobile penetration on productivity of each country As you can see in the graph the 10% penetration has increased their productivity to more than 20% of their initial value. As the penetration increases to a maximum of 70% in an already developed country there are no significant changes (Nyotamedia, 2014). So it is evident that the mobile penetration is indirectly affecting a country’s GDP and henceforth allows larger inflow of mobile phones[5]. GDP Gross Domestic product is nothing but the aggregate value of the total goods and services in a country in the form of their national currency. In a nutshell it defines the monetary health of a country. Figure 2. GDP affecting Mobile phone price (Stochastic frontier model) The GDP acts as a driving factor for mobile phone price since it is the total monetary value the county has to buy the particular product. A

Get Access