Why isn't everyone driving a Yugo or a Hundai. Why do people buy Sony when the can buy nomame TVs for less. For that matter, why do most people buy Dell or Compaq or HP or IBM rather than screwdriver shop boxes. Why buy HP or Epson printers when .. well, you get the point. I think your argument is better suited to pencils, erasers, potatoes, gasoline (and even there some people hesitate to buy no-brand), men's underwear, socks, etc.
Oh, by the way, there have been some fascinating "non-equivalencies" with some of the clone chips - the latest being an oops on loading Windows. What you are calling a commodity is an incredibly complex device. Ask National Semi how easy it is to produce that "commodity".
Branding is a MAJOR topic in business schools these days. Hey, anybody can make a soda with a cola name and taste. But Coke and Pepsi ain't sweating nights over the ease with which their products can be duplicated. Branding does matter. People feel more comfortable with a name brand that represents consistent quality. Just check out the aisles of your local supermarket and see how much shelf space is devoted to branded vs generic or store-brand products. Yup, someone can always save a nickel by buying the cheaper generic, but mostly they don't. The only place where generics seem to have made a significant dent is pharmaceuticals, and there are some other factors working there, including HMOs and insurance company plans pushing generics.
Good investing,
Burt |
