Choose and describe a business or product that you think has a particularly high or low...

Choose and describe a business or product that you think has a particularly high or low profit margin and share a photo of the business/product (or company logo). Why do you think that the profit margin is low or high, and why does it make sense given the company’s business model?

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Expert Solution

Choose and describe a product:- Apple iPhone, I dont think iPhone requires seperate description. It is a smart phone flagship sold by Apple Inc an American multinational technology company. iPhone holds the 3rd largest market share among smartphone.

Profit margin:- iPhone has a particularly high profit margin

Why do you think that the profit margin is high and why does it make sense given the company’s business model?:- iPhone is an premium offering in the smartphone market. iPhone probably costs more than all of its competitors. The profit margin of iPhone is high due to this premium pricing. The cost to build an iPhone might be nott much different than its competitirs, but still the price has a big difference with its competitirs. Apple is able to demand this premium pricing due to a couple of reasons. The major reason is, iPhone being a fashion statement (The cult phone). iPhone has become the phone people wanted to be seen with. Recently Tim Cook (CEO) has acknowledged that iPhone is a high-end product and a big budget device. So the customers donot mind shedding few extra dollars for a high-end device. Next major reason is the first-mover advantage, iPhone introduced many of the technologies that are used in smartphones today, and they dominated the markets during the early periods. These are few reasons why it makes sense for iPhone to demand higher price from customer. This in turn results in higher profit margin.

ekkarill92 answered 1 year ago

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