Macroanalysis paper for Apple iPhone

Macroanalysis paper for Apple iPhone
Name
Institution
Overview
iPhone is a gadget brought into existence by Apple Inc. developed to perform the mobile phone function, instant messenger and MP3 player (iPod) as it has been named by Apple Inc. The solution of innovation existing in iPhone was to do away with the traditional keyboard. A touchscreen was then replaced which was supported by the technology of Multi-Touch. With iPhone, the operation of everything is conducted by use of fingers and therefore stylus is not necessary. Wireless access to the internet is enabled by the iPhone through the WI-FI.
Macroeconomic Variables
Having a closer look at the three variables of macroeconomics which impact the demand or supply of Apple iPhone, what comes to my mind is a gross domestic product (GDP), unemployment and inflation. First and foremost, when taking a look at the GDP, we realize the measurement of market value performance of an economy within a country. This is typically done monthly for an updated information set. Close attention needs to be paid by Apple in the manner in which living standards are being measured in the U.S and what is available for the customers to spend. This is change impact on the rate of growth productivity (Brainard & Perry, 2005). The GDP is same as the total goods and services value generated during a year in a country. This, therefore, means that the growth of the economy is a maintainable rise in the goods and services amount generated over time in an economy.

In the phase of growth, if the GDP number is declining, this means that country’s economy is poor. Therefore, leading to low demand and which is later accompanied by an increase in supply.
Secondly, having a look at Apple’s unemployment, the company has to be worried about other companies that are innovative taking away their vital players. The unemployment rates and labor shifts need to be looked at keenly as they can possess a significant effect on a number of people who will be interested in working with them. When the unemployment rate is high, it is not easy to find a job. At the same time, those jobs are less rewarding because the laborers find it difficult to get promotions.
Inflation is another vital concept of macroeconomics. It refers to the rise in prices level measured by the price index of the consumer. This index reveals the way in which the money value changes as time goes by. It involves having a look at the cultural and economic change in the long run (Slack, 2015). Inflation appears to be among the essential policymakers and economists concerns as it imposes various economy costs. In the case of a high rate of inflation, there occurs erosion on the real money value. Those people who receive incomes that are fixed will fail to cope with the increasing cost of living. Among the population, wealth is also redistributed by inflation in a manner in which merit is not involved. Inflation in an economy can result to rise in the aggregate demand, which is not accompanied, by the rise in aggregate supply.
Macroeconomic Policies
Central banks enact monetary policy through the manipulation of the supply of money in an economy. The supply of money has an influence on the inflation and the rates of interest. Both of them appear to be main determinants of levels of consumption, cost of debt and employment. Researchers, however, seldom finds problems that are well-defined and controlled (Pandit & Shanmugam, 2008). I strongly believe that Apple Inc. requires putting much focus on improving its competitive advantage through innovation to stand out from its competitors. Furthermore, considering that the organization already has a solid brand name, it should focus more on capitalizing the brand name that it has and move ahead to cash in on the loyalty of the brand obtained from its consumers.
When an economy undergoes a recession, Keynesian stimulus becomes in order. This type of fiscal policy leads to increased government expenditure and lower tax rate. The recession results mean that the aggregate demand is at a level that is lower than the actual situation of full employment. The effect of the strength that other economies have on Apple is vital. This effect is as a result of a major lump of revenues of the company is being earned via the exports to countries like India and China. The amount of sales that have been achieved in the markets solely depends on the economy’s strength of these countries. For instance, if the economy of India dwindles and aggregate demand in the country declines, this will lead to diminished demand for Apple Inc. The current policy positions involve policy stabilization with the monetarists and focusing on policy instruments’ effectiveness. Recently, Fed has appeared to have raised concerns regarding the macroeconomic stability and the need to achieve it using the unconditional policy rule. The policies of macroeconomics can never be looked at separately from social policies, therefore changes regarding the gender-specific implications need to be taken into account.
Macroeconomic Conditions and Company Performance
a) Describe the trends of two previously selected company performance variable
Over time, Apple has been portraying a general growth of sales annually with compact dips ever since iPhone was introduced in the market. These sales reveal that Apple Inc. made a wise choice in proceeding to improve and market the iPhone year in year out. Apple has a tendency of acquiring maximum sales immediately after their new phone has been unveiled. It also attempts in utilizing the pre-sales advantages in order to ensure that they have a perfect supply and enough at hand. This also reveals that the sales of Apple are increasing in the initial weekend of launch as each phone is being released although the prices of the phone increase with the unveiling of the new model. I get an understanding that Apple Inc. requires to proceed with their present offering pre-sales strategy and to maximize their supplies during the few months that the demand is at its peak. The time series of macroeconomics seems to possess variable trends. Having these variable trends modeled as drifted random walks provides a better long-run behavior approximation of numerous economic variables in the U.S. While this analysis has been observed for more than 30 years, the recently developed statistical application has led to numerous vital conclusions for testing and developing theories as well as for macroeconomic policies formulation.
The marginal analysis application is what Apple uses in coming up with a decision whether to generate more iPhone 6s or iPhone 6s Plus. This approach enables them to have a close look at the present structure of the market and come up with the optimal decision for the organization. It is evident that Apple makes more money on the iPhone 6s Plus compared to iPhone 6s and it does not cost a lot to make than the iPhone 6s. For this reason, almost the entire analyses of macroeconomics presume the effective state existence (Besley & Persson, 2011). Apple is doing an excellent job of making new models of iPhone available to their consumers regardless of the fact that there exist few changes between the phones. A varying way in which Apple Inc. could utilize the marginal analysis is by looking if the phone that is costing high is really worth it if better battery life, better camera, and more features are availed.
Chart showing 5 years of iPhone performance
b) Analyze the relationship between the two company performance variables and the three selected macroeconomic variables for the past three years using a correlation graph. Be sure to include the graph that represents the correlation.
Apple Inc. utilizes the averages of the industry and goes ahead to conduct an analysis of their present sales and what is being offered by their competition. When iPhone was unveiled at first, there occurred limited supply, and this led to the huge in demand. The rate of inflation and unemployment will have an effect on their sales. If the rate of unemployment rises, this means that the people will not buy the phones, which are priced high. This will mainly affect the phones as they are considered to be luxurious. If the rate of inflation rises, this means that the phone’s price has to go up as well to cover the economic change. Therefore, if the inflation were to increase, the sales of Apple will also be affected negatively.

c) Assess how the current monetary policy and fiscal policy in the United States may impact your chosen company’s financial performance in the short term (six months to one year). Justify your response.
Fiscal policy is normally in the involvement of spending policies and taxation changes. Developing possible explanations regarding phenomenon is seen as a goal for macroeconomics (Jockers, 2013). There exists anticipation in the near term that fiscal and monetary policy will impose informal care work so that women can fully participate in the workforce. Reduced taxes mean that consumers will obtain more disposable incomes and businesses will have more cash for investments in equipment and jobs. This will, therefore, be an advantage to Apple. Stimulus-spending programs, which mostly involves the projects of infrastructure and naturally short-term, can assist in controlling the demand for Apple Inc. through coming up with short-term jobs. Increasing the consumption of taxes and the income normally means that disposable income is less. This can decelerate the activity of Apple. The changes in the short-term rates of interest have an influence on the long-term rates of interests like mortgage rates. Lower rates of interest mean that there will be the lower expense of interest for Apple Inc. and the consumers will encounter higher disposable income. This combination favors the companies as it always means higher profits for businesses.
References
Besley, T. Persson, T. (2011). Pillars of Prosperity: The Political Economics of Development Clusters. Oxford, OX: Princeton University Press.
Brainard, W. Perry, G. (2005). Brookings Papers on Economic Activity. Washington, WA: Brookings Institution Press.
Jockers, M. (2013). Macroanalysis: Digital Methods and Literary History. Illinois, IL: University of Illinois Press.
Pandit, V. Shanmugan, K. (2008). Theory, Measurement and Policy: Evolving Themes in Quantitative Economics. New Delhi, ND: Academic Foundation.
Slack, P. (2015). The Invention of Improvement: Information and Material Progress in Seventeenth-century England. Oxford, OX: Oxford University Press.