Rudedog, Well, you certainly know your history. <g>
Seem's to me issues of price elasticity, supply/demand, market share, etc., are interrelated to some degree.
For example, I think one could make the case that PC price is coming down through market share competition and/or through creation of new markets.
For those segments at or near saturation, (ie; high personal income or business markets), the issue is more likely that of creating an upgrade demand for products. Lacking a new killer app that requires the newer technology, company's are adding numerous features and functionality at lower prices. They're trying to create demand, and there is a large battle for share in this segment. The implication that you need the latest and fastest machine to realize the capability of the internet is all part of the hype. (When what we really need is reliable and affordable broadband access).
As for new markets, for some years now I felt the largest untapped segment in the US has been the low income home user. (Also ROW). I think the demand has always been high, (what parent doesn't want his kid to have a PC), but the supply of products to meet that demand was lacking. AST was the first to recognize this segment. (Compaq gets the credit, but the $999 AST systems sold through Walmart were the first successful sub-0's). Compaq significantly grew unit volume by servicing this market. (Maybe too successfully <g>).
Larry Ellsion recognized the new market potential, put failed to anticipate that the segment was so large it would foster share competition and new competitors. His solution was displaced by low priced PC's. Look at how fast e-Machines grew. They didn't grow in legacy markets, but in the new market based only on price. And of course the internet was the real killer app that blew that market segment to enormous size. (I'm assuming that those that could previously afford PC's were probably already on the net).
But as I'm writing this, my sense is we're both saying pretty much the same thing.
Anyway, I found you're comments interesting. Wonder how many on this thread ever saw an Altair 8080? <g> |
