Iphone Marketing Case Study

iPhone Marketing: Apple’s Illusion of Scarcity
Apple Inc. is a company that has has had some major ups and downs over the course of its lifespan. From Apple’s initial spike in success in the late 70s, to its struggle to compete with Microsoft in the 90s, to eventually becoming one of the most dominant companies in existence with its shift in focus towards mobile devices. The timeline of
Apple is a remarkable one, and having proved itself as a force to be reckoned with in the tech world for 40 years, one would expect that the company has come close to mastering its marketing, production, and distribution capabilities. This, however, proves not to be the case, as Apple has consistently failed to meet initial demand for its iPhone releases since

Whether or not Apple really is engaging in this questionable marketing strategy or not, let’s cover the main idea of scarcity illusion.
Scarcity, by definition, describes the global finiteness of resources. The phrase
“you can’t always get what you want” sums up the concept fairly well. As Eveline
Adomait states in her book, Cocktail Party Economics (2011), “Scarcity sits at the root of all economics in general and markets in particular” (p. 11). There is always a limited supply of something, meaning the item has a particular value that typically scales with its level of scarcity. When something is scarce, it has a high value, since there is not a large amount of it (and people are willing to pay more for the limited supply). Scarcity illusion is pretending that the good or service you are selling is in limited supply, increasing the demand (and value) for it. An example of this is when some online retailers claim there are “only two left” of a product. This compels the buyer to make an impulse purchase, since they are under the impression that the item is in high

It is strange that a company with a $600 stock price had their pre-order capacities filled within one hour of sales. Despite the notice of delays, Apple still broke a company record at over two million units sold on the first day of sales for the new smartphone model (Dobby, 2012). To add to the idea of
Apple creating false scarcity, even weeks after its release, the smartphone was also on order backlog for three weeks up to a month.
This isn’t the only occurrence of Apple failing to meet customer demand on opening day: the tech giant also had very few phones up for purchase for the iPhone 6 and 6+ launch (Federico-O 'Murchu, 2014). Economic analyst Gene Munster’s survey on
80 Apple Stores found that 58 percent of models were in-stock on Nov. 14 [2014], with the other 42 percent not for sale. The report also found that the wait time for an iPhone
6+ even 60 days after launch was 3-4 weeks (as cited by Wolfe, 2014).
In conclusion, a company as large and successful as Apple should be more than able to handle getting their newly released phones into paying customers’