Based on the recession of the economics, lots of companies in the world had been forced to reduced the number of workers or bankrupt. The reason for that is the profits are lower and the income of these companies decreased so that the worst thing can happen is people will lose jobs, they cant afford anything because they dont have money purchase their wants and their needs. For example the price of fuel fell to $40/barrel, so then more people will buy fuel and companies who provides that couldnt earn profits thus they will be forced to close down. However not all of these firms are being affected by the recession. The best example for this is the huge company called Apple.
Apple is one of the largest company in producing goods like computer(Mac book), Ipod, Iphone. Last year was the beginning of the recession, but Apple still increased their Net income by 14.88%(US$4.83 billion), and Operating income by 19.32%(US$6.28 billion), also their revenue(US$32.48 billion). These figures show that Apple hadnt been affected alot. Thus they dont have to worry too much about this situation.
There are some reasons why Apple can keep rising their income, the main reason is that Apple has a quite long term effect in our lives, as in their advertisements for the products such as Ipod and Iphone. Although these products have a highest technology but its being sold at a cheap price so that more and more people want to buy Apple. For example, a normal Zen mp3 player can costs me about $300 to $400, but i only have to pay $200 for the Ipod. Another reason for that is Apple has the higher quality of their products such as the quality of sound of the Ipod or Ipohne are better than others like Nokia phone or Zen mp3 player. Another minor reason is that Apple has a nice design and colors for their products. Therefore, with those reasons, Apple can survive through the recession and they can maitain the higher income and profits every year pass because they can fullfill the consumer's wants and needs by providing them fashionable and best quality goods.
After all, even now the situation of the economy is very dark scenario, it still can be boost.
The post was good but the point on more people buying fuel didn't come across very clearly to me.. do you mean that they buy shares in fuel companies?
ReplyDeletei think the point that the price of fuel falls so people will buy more fuel is totally incorrect.Previously you said that people lose their job and they don't have money to buy their needs and wants so in this situation what reason makes them want to buy more fuel???
ReplyDeleteanother point that i want to say is the apple products.I agree with you that all the products such as iphone,ipod,macbook are designed nicely but about the quality,im not sure about it.Each one has different preference so you can't affirm that apple has better quality.Also the same thing for the prices,we all know that apple products are always be sold at higher prices than others,not CHEAPER.
In my opinion firms may not close down because profits fall. However firms consider other factors before deciding to close down. For example if the firm were to close down it would have lost its pool of customer and stakeholders thus in future making it difficult to rebuild the business when times are better.
ReplyDeleteI disagree that Apple “hadn’t been affected alot. Thus they don’t have to worry too much about this situation.” In the short term Apple may not be affected. As in a global recession has a “time lag” for the effects to be transmitted to the real economy and from diffrent sector to sector, Apple undoubtedly will feel the impact of this recession in the long run. This can be seen in the declining trend of Apple’s share price since the beginning of 2008 form a high of $200.96 to the present low of $89.310. The one main reason for the increase in Net income in 2008 is due to the launch of Apples new iphone.
Nicholas Ang
Complements are spelled with an ‘e’. You may want to touch on further about why the demand for Apple products have not been affected despite the recession. Is it an income elasticity concept or increase in demand? You also highlighted some cross elasticity of demand concepts. Since it is seen to be more superior, it will be hardly affected even though its competitors would reduce their prices.
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