<both pc makers and isps are reducing the total cost of ownership to get their bpxes and servises moving. why? they aren't moving now - at least not the way they want.>
Funny, I thought not everyone was suffering huge inventories and execution problems like Compaq. ;-)
Seriously, you are right in one sense, that the average selling price for PC's are going down. But so far, that "giant sucking sound" of PC profits going down the drain have only hit some companies. Others like Dell are still prospering very nicely, even in the midst of an Asian crisis.
<it is total poppycock that prices get reduced just b/c prices for componenets or efficiencies improve. my job is to improve efficiencies and, given the choice, my company would keep the savings from these sources and tack it onto the bottom line.>
But your company would have the power to drive prices down should the need arise, right?
Your argument here is just reiterating the old argument that market demand sets the prices, not cost efficiencies. But don't you think the increased efficiency has led to higher supply, thus leading to lower prices? Companies like Compaq who screwed up in the supply side of things found themselves with an inventory that they had to sell off at low prices.
The same argument can be used to strike down the argument that DRDRAM is too expensive. Sure, manufacturing costs are higher than SDRAM, but the selling price has nothing to do with manufacturing costs. Well, not really. More accurately, it's the lack of supply that's driving the price so high. Once the supply increases due to more production efficiencies, the price will naturally fall until one day, DRDRAM falls below the price of SDRAM. Then the guys who are supporting SDRAM will find themselves falling behind because they weren't first to market with DRDRAM.
Tenchusatsu |
