Apple and Product Obsolescence

Paper Summary:

This paper discusses the iPod of the Apple Corporation. It specifically discusses how managers should cope with the pace of technology and the degree to which creating product obsolescence (when a product becomes out-of-date) is an advantage or disadvantage for the company. It discusses the best way to allocate resources within an organization and whether a company should always focus on improving technology and on what time frame.

Table of Contents:
Descriptive Summary
General Analysis
Critical & Comparative Analysis
Management Application

From the Paper:

"Allocating resources to R&D and establishing a first mover advantage over competitors, however small, is something managers frequently face in their day-to-day decision-making. Is the revenue generated by consumers shifting to the upgrade enough to stifle the ire and buyers remorse of current purchasers? When reducing the price of a relatively a new item like the iPhone, producers must remember how Apple had to apologize to consumers who bought the first, identical iPhone at inflated prices, only to see its price rapidly decline within a few months. Although artificially generated scarcity and excitement over novelty may be selling points, Apple's example serves as a potent warning as well as to the limits of relying upon these techniques."

Sample of Sources Used:

• "First mover advantage." (2008). Marketing Terms. Retrieved 13 Jan 2008 at http://www.marketingterms.com/dictionary/first_mover_advantage/
• Iizuka, Toshiaki. (Jun 2004). "An Empirical Analysis of Planned Obsolescence." Retrieved 13 Jan 2008 at http://www.aeaweb.org/annual_mtg_papers/2005/0107_1015_0616.pdf
• Wingfield, Nick. (12 Jan 2008). "The downside to Apple's frequent product updates." The Wall Street Journal. A2. Retrieved 13 Jan 2008 at http://online.wsj.com/article/SB120008119783584359.html?mod=mm_hs_marketing_strategy

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