Samsung takes over Nokia

Relatively, Nokia seems to have lost its spot in the cellphone industry.

One of the main problems with Nokia is that they are selling mostly inferior goods - nonsmartphones. But unlike goods sold at Walmart, another reputed and successful company well known for selling inferior goods, people generally are unwilling to invest in inferior goods for something like a phone. Only 14% of nokias shipments are smartphones, as compared to 35% of samsungs shipments which are shipments.

Its clear that Nokias strategy of trying to sell cheaper inferior goods with their service is not a profitable strategy. As other companies progress, the demand for Nokia phones will probably reduce even more, as it fails to keep up with the competition.

http://money.cnn.com/2012/04/27/technology/nokia-samsung/index.htm

Apple seems to not be worried

Although a variety of substitute goods were shortly released after the ipad, none of them seemed to have any effect. Despite the fact that some are even of similar quality, the apple brand name seems to be strong enough to hold in customers.

These tablets, although comparable in quality to apple tablets, seem to be scoffed at by the apple CEO as an inferior good. The brand name of apple is so powerful that this taste preference significantly shifts the demand. Assuming this is true, this is an example of horizontal price differentiation. Apple products are simply preferred [by most] over other products because of the brand, and are considered to be a superior product over less expensive brands.

This may all be about to change.

Windows is planning on releasing another tablet computer. Unlike the ipad, it can fold open and turn into a full fledged computer. Rather than aiming to beat out the ipad, this product seems to be aiming for horizontal price differentiation from the ipad, targeting a different market completely.

Cook may be scoffing now, but if their demand is reduced because of this new tablet taking away some of their customers, his reaction may change.


source: http://www.cnn.com/2012/04/25/tech/mobile/apple-ceo-windows-8/index.html?iref=allsearch

1 dollar coins not making the cut

The US is soon going to stop minting the 1 dollar coins that nobody tends to really like.

Its about time. The United states recently put in 650,000 to build another vault to just hold the 1 dollar presidential coins that people dont prefer.

But rather than stopping them completely, there are other things that the government could try to do to help build up the popularity of 1 dollar coins, if we already have them produced. By directly increasing the demand, it is possible that we can save these one dollar coins.

One method they could use is to try to increase the popularity of complementary goods, in a way. As of now, very few vending machines accept these dollar coins. If vending machines had slots for the dollar coins, its possible that the popularity of the dollar coins would go up. Dollar bills are also viewed as having a higher value than coins. The creation of more classy coin pouches or coin wallets could help in the decrease of this viewpoint.

Another option the government does have is to force everyone to switch from the use of dollar bills to dollar coins, or offer more incentive for the dollar coins than the dollar bills.

We also have to look at the opportunity cost of the coins. The coins cost significantly more than the dollar bills to make, and circulate slower, which means that we have to create more of them for the same amount of time. Though the latter could be changed, the costs of switching over to the coin do seem to outweigh the benefits.

As now, dollar coins just aren't popular enough yet to survive, and it doesnt look like they will be getting popular by themselves. The economical cost of the coins just dont live up to the standard either.

Source: http://abcnews.go.com/blogs/politics/2011/12/u-s-suspends-production-of-presidential-1-coins/
http://www.nytimes.com/2011/11/06/us/some-seek-to-replace-the-dollar-bill-with-the-dollar-coin.html