5 ms·

>"but then hurts them overall when the competitors are forced out and prices inevitably rise again," Can you provide a contempory example of this happening?

TeaDrunk 6y ago
Microsoft?
- missedthecue 6y ago
  Microsoft did the opposite. They bundled for free. They never pushed up costs
  - avianlyric 6y ago
    That conclusion is based on the premise that their software would have been priced the same if they hadn't bundled in "free" software. Not sure we have enough data to make that conclusion. Ultimately you were charged for the "free" bundled software, you just couldn't get a line item break down of how of the bundle price was made up by that "free" software. Not saying that Microsoft should break down their OS prices by bundled software, or that it makes sense. But without that breakdown you can't make the assertion that "They never pushed up costs".
    - scarface74 6y ago
      PC makers lose money when removing Windows from consumer PCs. The bundle crapware more than makes up for the Windows license fee.
      - avianlyric 6y ago
        I’m talking about the software Microsoft bundles (the classic example being Internet Explorer). Not software bundles on top by OEMs.
londons_explore 6y ago
It's hard to find an example, because no company is stupid enough to push out all the competitors. Instead they push out most of the competitors, while keeping one or two around (so they don't get into trouble with monopoly laws), and building big barriers to entry for anyone else. Then they can increase prices a bit, although the main profit source is in reducing unit costs now you have a big business and making all your profit through volume. It's certainly non-ideal for customers, but at the same time I think customers usually get a better service for a lower price than in a world with hundreds of competing companies (where overheads work out much larger)
- meditativeape 6y ago
  What would be the ideal situation? Like you said, having too many competing companies doesn't lead to great services at low cost because of the extra overhead and lack of volume, and having a monopoly gives one company too much power, then isn't duopoly a nice equilibrium?
  - bendergarcia 6y ago
    There’s a large spectrum between monopoly and perfect competition. Duopoly isn’t the only other option.
TheOtherHobbes 6y ago
If you include traders and creators in the various ecosystems and not just "customer" in the retail sense, examples aren't hard to find. Google and Facebook. The two biggest ad auction oligopolies own virtually all of ad-space between them. Is there real competition? No, there isn't. Apple. More and more locked down, less and less reliable, more and more expensive. Want to move? Want to repair something out of warranty? That's going to be... difficult. Ebay + PayPal. If one doesn't screw on fees, the other will screw you on fees. Ideally both will screw you on fees. Now with added Etsy, because also. Amazon. The giant changes its mind because something something ToS violation and leaves you with n figures of dead inventory and a locked pay out. What are you going to do? Spotify. You pay us for the music, we don't pay the artists. [1] YouTube. The record companies get income even if they don't have the rights to it, for the bargain price of a robo copyright claim. Because recognition algos are so very complicated and they make such terrible mistakes, so much of the time. These aren't just monopolies, they're massive market distortions where money is so dense it warps the Internet into stagnant pools of pseudo-inevitability, with a chilling effect on real innovation and creativity. And that's not even getting into issues of privacy, political influence, and the market value of personal data. [1] Not technically true, but considering the pitiful pay outs it might as well be.
- AsyncAwait 6y ago
  > Spotify. You pay us for the music, we don't pay the artists. To be fair, it's not like the major record labels paid artists well when you bought a CD previously.
AsyncAwait 6y ago
Intel sold low core count, repackaged CPUs for ridiculous prices for years, because they didn't have any competition. Now AMD's managed to claw black some of the market for itself, but it is still at a huge disadvantage compared to Intel. And AMD's only lucky that IBM insisted on two independent OEMs for its PC CPU's and that Intel wanted that deal bad enough. When it comes to the desktop CPU market itself, x86 has an unquestionable monopoly and no new player can attempt to design x86 chips without getting sued. But without x86 there's no point designing desktop chips in the first place.
- scarface74 6y ago
  Apple designs plenty of chips that have better performance than most computers shipping today. No one really cares about the desktop anymore. Apple alone sells more devices using its own chips than all PC sells combined and they are less than 15% of the market. Even when it comes to the better margin server market there is a move toward both AMD and custom ARM chips.
  - AsyncAwait 6y ago
    For consumption? Sure. For creative work? Not so much. As for the performance, we don't really know yet. Single core benchmarks of a CPU with low core count may play out differently with tens or hundreds of cores, 5GHz frequencies, active cooling etc. You can't extrapolate benchmarks in a linear fashion. No doubt the A Series is impressive, however it hasn't really been tested in a "Mac Pro" yet, so we'd have to see. Then there's the issue of compatibility and I fail to see how Apple plans to break the Wintel monopoly on the desktop. Sure, it may be able to transition to ARM with the Mac, but unless its chips are available to everybody, (unlikely), there's hardly a route I see for Apple to end x86 dominance.
    - scarface74 6y ago
      There is plenty of software for “creative” work for iPads. Adobe in particular has shown how much better performance is on ARM chips than Intel. The vast majority of consumers are running Mac Pro level hardware. In fact, most computers that are sold are laptops. Why would Apple care about “dominance” in the PC market? It cares about going after the most profitable share of the market. It’s not like most PC makers are making money hand over fist selling consumer PCs. In the server market, both Amazon and Google are creating their own Arm chips for their data centers.

TeaDrunk 6y ago

Microsoft?

missedthecue 6y ago
Microsoft did the opposite. They bundled for free. They never pushed up costs
- avianlyric 6y ago
  That conclusion is based on the premise that their software would have been priced the same if they hadn't bundled in "free" software. Not sure we have enough data to make that conclusion. Ultimately you were charged for the "free" bundled software, you just couldn't get a line item break down of how of the bundle price was made up by that "free" software. Not saying that Microsoft should break down their OS prices by bundled software, or that it makes sense. But without that breakdown you can't make the assertion that "They never pushed up costs".
  - scarface74 6y ago
    PC makers lose money when removing Windows from consumer PCs. The bundle crapware more than makes up for the Windows license fee.
    - avianlyric 6y ago
      I’m talking about the software Microsoft bundles (the classic example being Internet Explorer). Not software bundles on top by OEMs.

londons_explore 6y ago

It's hard to find an example, because no company is stupid enough to push out all the competitors. Instead they push out most of the competitors, while keeping one or two around (so they don't get into trouble with monopoly laws), and building big barriers to entry for anyone else. Then they can increase prices a bit, although the main profit source is in reducing unit costs now you have a big business and making all your profit through volume. It's certainly non-ideal for customers, but at the same time I think customers usually get a better service for a lower price than in a world with hundreds of competing companies (where overheads work out much larger)

meditativeape 6y ago
What would be the ideal situation? Like you said, having too many competing companies doesn't lead to great services at low cost because of the extra overhead and lack of volume, and having a monopoly gives one company too much power, then isn't duopoly a nice equilibrium?
- bendergarcia 6y ago
  There’s a large spectrum between monopoly and perfect competition. Duopoly isn’t the only other option.

TheOtherHobbes 6y ago

If you include traders and creators in the various ecosystems and not just "customer" in the retail sense, examples aren't hard to find. Google and Facebook. The two biggest ad auction oligopolies own virtually all of ad-space between them. Is there real competition? No, there isn't. Apple. More and more locked down, less and less reliable, more and more expensive. Want to move? Want to repair something out of warranty? That's going to be... difficult. Ebay + PayPal. If one doesn't screw on fees, the other will screw you on fees. Ideally both will screw you on fees. Now with added Etsy, because also. Amazon. The giant changes its mind because something something ToS violation and leaves you with n figures of dead inventory and a locked pay out. What are you going to do? Spotify. You pay us for the music, we don't pay the artists. [1] YouTube. The record companies get income even if they don't have the rights to it, for the bargain price of a robo copyright claim. Because recognition algos are so very complicated and they make such terrible mistakes, so much of the time. These aren't just monopolies, they're massive market distortions where money is so dense it warps the Internet into stagnant pools of pseudo-inevitability, with a chilling effect on real innovation and creativity. And that's not even getting into issues of privacy, political influence, and the market value of personal data. [1] Not technically true, but considering the pitiful pay outs it might as well be.

AsyncAwait 6y ago
> Spotify. You pay us for the music, we don't pay the artists. To be fair, it's not like the major record labels paid artists well when you bought a CD previously.

AsyncAwait 6y ago

Intel sold low core count, repackaged CPUs for ridiculous prices for years, because they didn't have any competition. Now AMD's managed to claw black some of the market for itself, but it is still at a huge disadvantage compared to Intel. And AMD's only lucky that IBM insisted on two independent OEMs for its PC CPU's and that Intel wanted that deal bad enough. When it comes to the desktop CPU market itself, x86 has an unquestionable monopoly and no new player can attempt to design x86 chips without getting sued. But without x86 there's no point designing desktop chips in the first place.

scarface74 6y ago
Apple designs plenty of chips that have better performance than most computers shipping today. No one really cares about the desktop anymore. Apple alone sells more devices using its own chips than all PC sells combined and they are less than 15% of the market. Even when it comes to the better margin server market there is a move toward both AMD and custom ARM chips.
- AsyncAwait 6y ago
  For consumption? Sure. For creative work? Not so much. As for the performance, we don't really know yet. Single core benchmarks of a CPU with low core count may play out differently with tens or hundreds of cores, 5GHz frequencies, active cooling etc. You can't extrapolate benchmarks in a linear fashion. No doubt the A Series is impressive, however it hasn't really been tested in a "Mac Pro" yet, so we'd have to see. Then there's the issue of compatibility and I fail to see how Apple plans to break the Wintel monopoly on the desktop. Sure, it may be able to transition to ARM with the Mac, but unless its chips are available to everybody, (unlikely), there's hardly a route I see for Apple to end x86 dominance.
  - scarface74 6y ago
    There is plenty of software for “creative” work for iPads. Adobe in particular has shown how much better performance is on ARM chips than Intel. The vast majority of consumers are running Mac Pro level hardware. In fact, most computers that are sold are laptops. Why would Apple care about “dominance” in the PC market? It cares about going after the most profitable share of the market. It’s not like most PC makers are making money hand over fist selling consumer PCs. In the server market, both Amazon and Google are creating their own Arm chips for their data centers.