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This is really interesting because very recently, a bunch of American solar companies joined together to sue Chinese solar companies for selling panels "below c
by orijing 15y ago
This is really interesting because very recently, a bunch of American solar companies joined together to sue Chinese solar companies for selling panels "below cost" (i.e. "dumping") [1].
I don't understand how that works. What is the cost they use? For industries with steep learning curves, the right strategy would be to use expected future cost as the basis for business decisions, rather than the trailing average (realized) cost, in order to build the market and more quickly progress on the learning curve.
If that's illegal (it's often used in instances I mentioned above), then I feel like progress in industries with steep learning curves will be slower, because companies will be more timid, causing the market to grow less quickly.
What is everyone's opinions here?
[1] http://www.ibtimes.com/articles/234291/20111019/solarworld-solar-panels-cells-china-antidumping-subsidies-lawsuit-complaint.htm http://www.ibtimes.com/articles/234291/20111019/solarworld-s...
- danssig 15y agoPersonally I wish selling below cost were illegal across the board. It's a destructive practice and allows people who have no stake in one kind of market kill that market. Take the Amazon Fire, for example. They lose money on every unit sold but they don't care because they expect more sales in their real business: retail. How are companies who only make these devices (e.g. Apple) supposed to compete with that? What market are they supposed to use to makeup their losses. And how can they protect this other market from getting hit with the same thing?
- icebraining 15y agoHow are companies who only make these devices (e.g. Apple) supposed to compete with that? Apple doesn't only make those devices: see iTunes and the App Store. Besides, one can argue that they do the same in their deal with AT&T (which cuts $100 from the iPad price). But to answer your question, there is more to compete on than price; in fact, Apple knows that well, considering they've been selling Intel laptops with less bang per buck than other manufacturers, like HP and Dell, and still sells a lot.
- danssig 15y agoThis doesn't make it right. I'm surprised people on this site support below cost selling so much. It is fundamentally a "big player" practice that newcomers can't usually compete in. Imagine you made a company selling one kind of tablet that was vastly better than anyone else's and didn't have an iTunes or App Store to supplement selling below cost? Then you just can't even enter the market because other people are giving their product away. How can anyone say that is the market working? The market has decided this product is worth less than it costs to make? Then it shouldn't exist.
- mhb 15y agoWe should thank the Chinese for giving us free solar panels which will eventually help disentangle us from the geopolitical mess in which our fossil fuel dependency involves us. We will be able to devote the intellectual and financial resources formerly devoted to those pursuits to more beneficial endeavors.
- mattmanser 15y agoI'm more inclined to view it cynically, China have already said they want to be the world leader in alternative power sources, a move like this could be seen to deliberately destroying foreign competition, stopping any incentive for non-Chinese companies to invest in R&D leading to a Chinese monopoly on the technology. At best China will collapse a-la Russia under its own evil government, at worst this will help prop them up for many years to come. Scary thought. I'm not thanking any nation involved in such wholescale thought control. Let's not forget it's an evil nation, they're liberty and freedom hating bastards. This seems to be a lost thought recently in the capitalist land rush that's been going on the last decade.