Question 1 (1).docx - The nature of the product market...

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The nature of the product , market concentration . The smartphone market is one of the most prominent oligopolies. It is one of the largest and most profitable markets in the world . The market structure of Apple Inc. can be considered oligopolistic . An oligopoly market structure is where the number of sellers are small, each of them holding a sizable percentage of the market share, with Apple and Samsung being the dominant players. The ranking of smartphone suppliers according to market share from above chart shows, Samsung (19%), Apple (13.4%) and Oppo, Xiomi, Huawei and Vivo hold the third place in the market altogether. The market concentration is calculated based on the Herfindahl- Hirschman (HH) Index using the market share figures from the above table. From the calculation, it shows that HHI is 2350, hence the smartphone market can be considered as a concentrated market. Apple has been able to maintain their position because it’s too costly of difficult for any rivalry to enter the industry. These create huge entry barriers for other competition.
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