Wednesday, October 14, 2009

The Ugly Truth

Dave Winer:

But the netbook is not just a new product. It exposes something pretty ugly about the computer industry. They've been controlling prices. There must have been price collusion before netbooks came out. It's clearly possible to build notebooks for much less than they manufacturers are charging...

(Michael Dell)'s complaining about netbooks probably because his expense structure can't sustain the business. He's a leading vendor of netbooks, yet is selling against them. This means only one thing, and it's kind of obvious -- he's losing money on each sale. He can't afford to be in the business. Which means he can't afford to be in business at all.


Peter said...

Is he literally losing money on each sale or just upset because this means downsizing?

I can imagine business scenarios where selling a product at a loss is the best strategy taking a bigger picture into account, but what would the bigger picture be here?

Bill Kerr said...

On another point, the discussion in the comment thread at Dave Winer's blog about what it means for the user to take over - and how this differs from "visionary" (and reactionary) is interesting:

"Actually is you look a bit deeper you'll find that Asus started out trying to make a OLPC computer, they offered what they came up with, and users decided it was a general purpose computer, not primarily for children.

Had they stubbornly insisted on being the visionaries they would have said "The users are wrong, they are buying these for the wrong reasons, we need to educate them and tell them not to buy it." Which would have of course been insane.

Instead they listened to the users and gave them what they want. This meant offering XP in addition to Linux and adding a hard disk, and making the keyboard and screen a little larger to accomodate adult hands and eyes."