Smartphones Are Part Of Daily Life For Most People

1004 Words5 Pages
Smartphones are part of daily life for most people. The technology underlying the smartphone is increasingly gaining sophistication and this has culminated in smartphone devices with more advanced features being released into the market every year. Some of the most dominant manufacturers of smartphones include Samsung, Apple, Huawei, HTC and LG. Market trends indicate that smartphone market is presently the most rapidly growing segment of the mobile devices market. This paper will investigate the factors influencing the supply and demand of smartphones, their effect on the equilibrium price, and the expected changes in demand and supply of the product soon.
Factors Affecting Demand for Smartphones By and large, the demand for smartphones has seen a fundamental increase in the recent years. The substitution effect is one of the factors ascribed to this. “The substitution effect is the economic understanding that as prices rise — or income decreases — consumers will replace more expensive items with less costly alternatives.” (Investopedia.com, 2010). Today, basic smartphones with integrated high-end features such as high-megapixel cameras, Wi-Fi connectivity and capacity to hold numerous mobile applications are being sold in the market at affordable prices. This is especially the case in Africa, Middle East and other developing markets where most mobile operators have formed partnerships with smartphone manufacturers such as Microsoft and Huawei to produce low-priced
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