In this article, the author adopts network effects to explain the causes of decline in sales of Apple Watches.
“In an article by Jay Yarow, he adds a figure from the web that shows interest in the Apple Watch has dropped below that of the iPod. Furthermore, he states that’ People, like myself, have sold their watches. Other folks are find that life without the watch isn’t so bad.”- Cornell University, Networks, Course blog for INFO 2040/CS 2850/Econ 2040/SOC 2090
R(x) refers to the intrinsic interest of a consumer with an x reservation price while f(z) refers to the benefit of each consumer from having z fraction of the population using Apple Watch. R(x)f(z) refers to the function that shows consumers who are fond of the benefits offered from purchasing and using apple watches when the users’ population is at large. Therefore, essentially, the decline of apple watches purchases could be explained by people’s realization of apple watch’s useful purposes. Maybe people just don’t find apple watches that worthy to have money spent on, that’s why users’ population declines which causes low intrinsic interest on the product from the public.