To what Extent is price a factor?

https://www.verizonwireless.com/smartphones/apple-iphone-x/

The economic principle I’m exploring is “People Generally respond to incentives in predictable ways” My research question to help me study the economic principle is “To what extent is price a factor. ” The article published in forbes titled “iPhone X Failure Forces Apple Into Drastic Action ” demonstrates this economic principle because it shows how if a phone is too expensive that people will not buy it.

 First, Apple has cut manufacturing for the iphone x by 50%. This is the effect that people not buying the phone has on the company. Because so many people did not buy it they had to reduce manufacturing.

 Second, Apple originally had a goal of 40 million units. Now 20 million seems like a more reasonable goal. Part of the reason that it did not do well is that a lot of people did not like the design of the phone. Combine that with the price and a lot of people will not buy it.

 Third, Apple has a habit of cutting production every quarter following the rush of the festive period, so this should be expected, Except this perhaps hides the key point to the discussion. Even though Apple’s cut is expected, that cut will have featured in the estimates of all of the suppliers. This isn’t the expected drop that was already factored in by the suppliers who understand and manage their tight margins, this is a cut in excess of the expected drop. In my next blog post I will research: what companies do to keep you loyal?