Document Type

Closed Project

Publication Date

Fall 2016


William Eisenhauer

Course Title

Advanced Engineering Economics

Course Number

ETM 535


iPhone (Smartphone) -- Upgrading, Consumers -- Decision making -- Mathematical models, iPhone (Smartphone) -- Economic aspects


Apple is one of the well-known brand which provide users its innovative devices such as cell phones, computers, apple TV etc. To help the customers stay up to date with the newest cell phone device, the Apple company has introduced a concept of the apple upgrade plan which lets the customers upgrade to a newly launched cell phone device every year. This paper first compares the cell phone rates by studying the apple upgrade plan offered by Apple along with different carrier plans. Next, it studies the inflation rates (high, average, and low) along with the AppleCare+ option, and helps users find the most effective alternative in cost for three different types of consumers: perfect, average, and clumsy consumers. We conclude that in high and average inflation rates, the best alternative for a perfect and average consumer is to upgrade to iPhone through a carrier without purchasing AppleCare+, although the clumsy consumer should opt for apple upgrade plan. However, in the low inflation rate, the average consumer should choose apple upgrade plan if they expect next four years in a low economic development.


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