It is rumored that Amazon's new smartphone will have some 3D technology (CBS Interactive, 2014). According to CBS Interactive (2014), "Perhaps for smartphone buyers underwhelmed by the gradual iterations seen in the most recent iPhones and Galaxy S flagships, a little 3D magic might be enough for them to look again" (para. 13).
Bostic (2014), "Smartphones are now the predominant type of cellular phone in the United States, accounting for more than half according to a new poll, while Apple's iPhone leads all other devices among smartphone owners" (para. 1). Households with higher income and advanced education tend to by iPhone users (Bostic, 2014). Bostic (2014), "Twenty-five percent of respondents from households making between $50,000 and $75,000 said they were iPhone users, and 40 percent of respondents is pulling in $75,000 or more owned iPhones" (para. 5). 97-98 percent of people ages 18-49 have a cell phone (Pew Research Center, 2014). 88 percent of people in the age group 50-64 have a cell phone and 74 percent of people in the age group of 75 (and higher) have a cell phone (Pew Research Center, 2014). If Amazon prices their new phone low, this could lead to an increase in a quantity demanded. Higher costs will lead to a decrease in quantity demanded. The equilibrium prices in the market changes based on quantity supplied and quantity demanded. If there is an increase in a quantity demanded and a decrease in quantity supplied, this will result in a lower equilibrium price (Digital Economist, 2003). When production prices are high, this will result in a shortage, leading to a higher equilibrium price (Digital Economist, 2003). According to Tech Times (2014),"While the smartphone market continues to show robust worldwide shipment numbers, market growth will begin to level off due to market saturation and a slowdown in innovation for higher end models"" (para. 1).
Technological Innovation.
