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> I can buy a quad-core CPU restricted to 1.33GHz on the cheap and 6 months down the line I can put down a little more cash to get it unlocked to a 2.00GHz. Ac
by elblanco 16y ago
> I can buy a quad-core CPU restricted to 1.33GHz on the cheap and 6 months down the line I can put down a little more cash to get it unlocked to a 2.00GHz.
Actually, you're buying a 2.00Ghz part on the super cheap, you just aren't allowed to use all of what you bought under this kind of payment scheme. This brings up two downsides to this:
1) Consumer's know that the thing they purchased is not really under control...many people want to be able to do whatever they want with what they purchased. This is basically the same as a pay-per-use license like with software today...which most people absolutely hate.
2) It tells the market that the 2.00Ghz part is way overpriced. It's a powerful signal of how bad of a value the company is offering since you actually can but the 2.00Ghz part at the lower price, it's just artificially broken. How long till crackers figure out their way past such a lockout scheme?
- tptacek 16y agoThis isn't how pricing works. Prices track value (in the abstract) and the market (in reality); unless the good we're discussing is sorghum, prices don't track costs. If pricing did work this way, Photoshop Elements would have cost the same as Photoshop.
- nkurz 16y agoIf I may ask, why is sorghum your standard example? Just because the word "sorghum" sounds so sweet (and I agree), or did you have a transformative sorghum experience as a child?
- tptacek 16y agoIt's the least valuable commodity I can think of.
- elblanco 16y ago> Prices track value (in the abstract) and the market (in reality) I think that's what I said. In the abstract, consumers will feel like they are getting gypped by paying for the fully unlocked part knowing that the exact same thing is available at a cheaper price -- part of the consumer's mindset will be "we know chip manufacturer A has to make a profit, but they're clearly making a profit on the cheaper part or they wouldn't sell it, the premium part then is just a con-job and manufacturer A is just getting greedy. This reduces the desirability of the premium part. It'd be like selling a 6-cylinder car and a 4-cylinder car, only the 4-cylinder is actually a 6-cylinder with two of the pistons turned off (and can be enabled by paying some premium and having the other two pistons turned back on -- don't think something like this hasn't already been thought of in the car industry). People will just buy the 4-banger and take it to their local ricer shop and have the other two turned on and a type-R sticker put on the back. In reality, it'll reduce the price of the premium part as demand shifts to the cheaper (but exactly the same) alternative OR, if the price of the premium part drops so low as to be extremely close or at parity with the slower part, people will stop buying the lower priced part. Either way, in reality, they should have just sold one part and not wasted everybody's time.
- ryanpetrich 16y agoI don't work in the industry, but I'd imagine some of the cheaper budget chips don't make profit on their own--they require the more expensive non-defective chips to break even.
- caf 16y agoIt's even possible for the lower-priced chips to make a loss, as long as their volume is sufficient to pay for a large share of the development costs that make the high-margin chips possible.
- iloveponies 16y agoWith the exception that Photoshop Elements can't be "unlocked" to become full blown Photoshop, your comparison here doesn't work.