On Tue, 24 Nov 2009 00:51:02 -0800, Daniel Prince
wrote:

Jeff Liebermann wrote:

Yeah, but along with the general decrease in quality, there has been
proportional decrease in price. It's price that driving the decline
in quality. Running the operating temperature and voltages near the
point of failure is one way to save on costs.


They wouldn't make junk if consumers didn't demand low prices. There
are usually "premium" versions of almost any consumer product, but few
can afford the price. (If you want quality, be prepared to pay for
it).

How much would the retail cost of a computer power supply or
motherboard etc. increase if they were made to last twice as long?
Five times as long? Ten times as long?

The usual markup from cost to sales to retail prices is about 4.5
times. It's somewhat lower for commodity electronics, perhaps 3.5
times. It's somewhat higher for newly introduced products, where the
R&D costs need to be recovered quickly. I'll call it about 4 times so
I can do the math without a calculator. That means that for every $1
increase in parts cost, Joe Consumer gets to pay out $4 at the cash
register.

The problems start when there are competing products. I call it the
Walmart effect. Walmart, Kmart, and many online vendors specialize in
selling solely on the basis of price. If there are two competing
products, differing only a few pennies in selling price, *ALL* their
orders will go to the lower priced product, with nothing to the higher
priced equivalent. Walmart aggravates the effect by setting the price
at some artificial low level, and challenging their vendors to meet
their price goal. If they fail, then they either take a loss selling
to Walmart, or all the business goes to the competition.

Much as I don't like it, such cut throat pricing practices are
becoming the norm in computer sales. If I were to design and produce
a premium and long life computer product, I can forget about the mass
market, volume dealers, and most direct sales channels. I would have
to rely on distribution and probably heavy advertising, which
dramatically raise my costs. Do you think a $50 Monster Cable power
strip is really any better than a $5 hardware store equivalent? It is
a little better built, but the rest of the price tag is distribution
and advertising.

Incidentally, if you want to see premium electronics, the audiophile
market is a good place. Need a $1,000 premium power cord?
http://www.audioadvisor.com/prodinfo.asp?number=KKPK14PAL
That's what it takes to sell a premium product.



--
Jeff Liebermann
150 Felker St #D http://www.LearnByDestroying.com
Santa Cruz CA 95060 http://802.11junk.com
Skype: JeffLiebermann AE6KS 831-336-2558