By Lect. Wannaphong Durongkaveroj
Faculty of Economics, Ramkhamhaeng University
|Photo Source: www.forbes.com|
From time to time, a mobile phone becomes a smart phone with more advanced operating system. In market, there is a total change for the suppliers of it as Nokia, Sony Ericsson, and Siemens are no longer the main share in the market. Instead, today is the era of Apple Inc. products (Iphone), Samsung, Huawei, and LG. The main purpose of this article is to explain the reasons behind the success of smart phone's sales, especially the phenomena in Thailand.
In economics, smart phone has been transformed from luxury to necessity which means that price can no longer distort the quantity demanded - no matter how high price smart phone is, people still demand it. This transformation of the kind of goods causes many effects to economy because it can be referred to changes of consumer's income, taste, and economy overall. When people have more income, people normally buy things other than necessary goods. In the previous day, only upper middle income group can buy the mobile phone due to its high price. Also, computer is still the main device to complete your job. As I can remember, mobile phone price is around 40,000 Thai Baht (Approximately 1,200 USD.). However, in the last five to ten years, its price was dramatically declined with more technological improvement which allows the lower middle income and low income group able to buy it. Smart phone is affordable as its price starts from just 1,000 Thai Baht (Approx. 30 USD.) to less than 30,000 Thai Baht (Approx. 1,000 USD.). In Thailand, almost everybody (more than two-thirds) owns smart phone in the different brands, even students of secondary education. The most-wanted gift among children nowadays is no longer robot, dolls, or toy car but smart phone. Additionally, people know how to use Facebook and Line better than Thailand's current economic issue. For its popular function which leads to the battle among suppliers, smart phone's camera is the first object in decision. Due to its most-wanted option, there is a joke that when there is an accident or unusual events, people take a photograph first instead of helping calling the related person or doing more proper thing.
Other than its low price and great benefit, social value (given) or popularity in Thai society about smart phone is a core reason for the increasingly impressive sales of smart phone market. A high demand is efficiently captured by a huge amount of supply. People who owns a top brand like Iphone or Samsung (flagship phone) are likely to be accepted from friends, colleagues, and society. It's special feeling or pride which is stemmed from how people feel when they hold it in hands. In Thailand, generally, it is a fact that the rich is likely to gain respect from society. The working people, normally, would like to have condominium in Bangkok, luxury car, smart phone, and other expensive things. Thus, having a smart phone makes people who own them feel like they have a small asset, namely the Baby Asset. They can tell everyone proudly that they buy the latest Iphone no matter they use credit card installment. AS explained, it makes you feel like you have a place in society or feel superior to others. This feelings have been taken place at the expense of phone's price and monthly phone bill. However, this Baby Asset has it own characteristics. Its depreciating rate, nevertheless, is quite higher than other asset. Within only one second after buying it, your asset value unavoidably decreased. But who's care?
I have just bought new smart phone for two weeks after dropping the old one. Interestingly, it is my first time to realize that the price of its spares, especially the screen is much expensive price - around 50 percent of its price in some brands. In term of its advantages, I spend a lot of time in a day staying with my smart phone - not just working but also social networks which becomes the new word in the millennium. If there is someone asking me about my future plan to invest, I will immediately answer him or her that...I also own a smart phone.