Question

Analyze the market for Apple AirPods, based on the following ! *Please not the the hot dog and burger example*

I. Identify the market structure for your product, and describe 2 strategies that producers in this market could adopt to compete more effectively or to increase their market power.

*Graphical detailed descriptions included*

Answer 1

answer-

Apple’s AirPods have been plagued by availability issues, but that hasn’t stopped them from dominating the truly wireless headphone market. A new report from market research firm NPD shows that Apple has overwhelmingly dominated the industry so far this year, fending off competition from the likes of Samsung and Bragi…The report explains that over 900,000 completely wireless headphones units have been sold in the United States so far this year. Dominating those sales have been the AirPods, which have accounted for 85 percent of dollar sales since their release in December.

Apple’s success makes the barrier of entry higher for competing brands, today’s research explains. New products will need “some differentiation in features, sound quality, or associated services.”

Apple's airpod created a market structure of Oligopoly where there are very very less competition present for this product and since its launch there was none at that time.

The two strategies that Apple would take to compete more effectively or to increase their market power is by using Price leadership strategy in which they can offer lite version of this product at low price which would create a huge demand for this product and second strategy would be adding new features like long battery life, noise cancellation at high level, new look to design etc kind of features which would create a barrier to competition to entry into this market.

From this graph we can see that the sale of this apple airpod is increasing from its launch year to now and it is expected to grow because of its brand image, new technology which makes it different from other wireless earphones.