Mobile Phones and Competition – Econlib

Here’s a hot shopping tip that I suspect most readers won’t be able to take advantage of – right now, Apple is discounting the iPhone in China. But I don’t bring that up because I actually hope to influence anyone’s purchase. I find it remarkable for other reasons.

It may seem strange that I would find it noteworthy that a company was offering a discount on one of their products. Isn’t that what companies do all the time? Not in Apple’s case. They rarely – almost never, in fact – sell their devices at a discount. Take, for example, the “Black Friday” shopping experience in the United States, which usually kicks off the holiday shopping season leading up to Christmas. Many mobile phone companies offer huge discounts during this event. In fact, in recent years these discounted holiday prices have appeared well before Black Friday and always last through Thanksgiving weekend. Google and Samsung will often offer their phones at very low prices, as well as offering bulk deals and improved trade-in prices for older phones.

Last year, for example, Google slashed $200 off the price of its flagship phone, the Pixel 8 Pro, even though it was released last month, and knocked $400 off the price of the phone/tablet hybrid, the Pixel. Fold. At the time, Apple only had promos during the actual Thanksgiving weekend, and instead of discounting their products, items were sold at full price, but certain purchases would come with an Apple gift card that could be used to purchase more Apple products. So, buying a new Apple TV 4K will also get you a $50 gift card from Apple.

So why is Apple now offering its high-end iPhones at hundreds of dollars worth of discounts in China, while offering nothing like that kind of discount in the United States during the holiday discount shopping event? It is because in China, Apple facing strong and increasing competition from companies like Huawei – competition that it does not have to face in the United States market, because the United States government has banned those companies from competing in the US market for obvious “national defense” reasons. (Though it’s not as minor as a crime he revealed (by Jon Murphy, where defenders cite “national security” as the reason for banning not Chinese electronics, but Chinese garlic.) As a result, Chinese consumers are able to get iPhones at better prices than American consumers, because the Chinese government allows more competition. in the cell phone market than the US government allows. And it seems that this move on Apple’s part has been successful, as Chinese consumers have responded well to the price drop. It’s just a shame that American consumers aren’t getting the same benefits from this competition.

I wrote before about how the Justice Department’s assertion that companies like HTC and Microsoft have failed to compete with Apple in the United States because of “barriers to entry” is absurd on its face. To repeat, my claim was that it is absurd to say that Microsoft, which had been selling smartphones for years and had an established user base of millions upon millions of customers before the iPhone came into existence failed to compete with the iPhone because Microsoft faced “obstacles. in entering.” But this does not mean that there are no barriers to entry in the mobile phone market by any means. However, the most important barriers that exist now are due to government regulations. Before the government tries to remove the dot from the market, it should first turn its attention to the plank created by its policies.


Source link