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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (53754)	8/19/2009 5:50:41 PM
From: Maurice Winn	2 Recommendations Respond to of 217899

ElM, you are partly right. The 2 billion in India and China do provide much better economies of scale and they reduce unit costs. The rounding errors of Japan, Indonesia, Taiwan, Korea are big enough to do a lot too. But even 3 billion people outside Asia is enough to reduce unit costs to very low levels. Here is some complex mathematics to show what I mean. If some software costs $1,000,000 to produce and 10,000 people use it, the cost per person is $100. People would think about it before buying [most people - not USA lawyers]. If 100,000 people use it, the cost per user is $10. That's not such a big deal but people in India and maybe China would think about it as a significant cost. If 1,000,000 people use it, it's only $1 a throw. That's not a lot even for people in Indonesia but it's still 100c and they can buy fruit and vegetables for less than that. If 10 million use it, it's only 10c a go. That's getting cheap. If 100 million use it, that's only 1c and while people in India might bend over to pick up 1c, such coins don't even exist in NZ. If 1 billion people use it, we are down to a tenth of a cent and things don't get much cheaper than that. If we add another 1 billion or 4 billion to the equation, it doesn't make a difference. Even for things which require materials such as laptops, the cost of the thinking which goes into getting a laptop from digging the raw materials out of the ground to the end user is very high compared with the cost of the materials. So unit costs can be very greatly reduced by selling 100s of millions instead of a few thousand. That's why Nokia has done so well - their economies of scale make them profitable but competitors lose money. They still have to do things right, but it's a lot easier for them. So yes, you are right, but it's not a big deal in cutting prices to have another billion. It certainly helps. If you believe there is a shortage of resources, having more people is a problem, but there is enough oil, platinum, tin, methane, iron etc to do anything. The billion coming on stream in China don't need to all have an SUV. They have each have a little automated car managed by GPS, transponder, electronics and photonics, running on fuel cells powered by nuclear reactors, or solar power from Australia [converted to methanol], or ethanol from plants. They wouldn't even need traffic lights. Just as they are going from no phones directly to cyberphones [skipping 100 years of copper wires strung around the streets and busy signals with high costs], they can go directly from walking to cheap little cybercars which they won't even drive. Mqurice