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The low end eventually becomes a satisfiable alternative for price sensitive consumers and may become the majority market if _consumer preferences follow_. Tha
by kristopolous 2y ago
The low end eventually becomes a satisfiable alternative for price sensitive consumers and may become the majority market if _consumer preferences follow_.
That's important. Even more expensive brands in the purely functional space like Tektronix, DeWalt and Zojirushi can still command a preference and not for the same reason as Patek Philippe or Christian Louboutin.
Also when preferences aren't considered, the base observation can become rather risky.
For example, it implies a majority of American cars will eventually be electric microcars like the Wuling Hongguang Mini EV or Chery QQ Ice Cream because:
1. Most cars on the road were bought used and these cars cost less than a used car.
2. The battery efficiency of the smaller vehicle means you can charge it without special hardware in reasonable time.
3. The vehicle speed and range are increasingly adequate to satisfy most consumers needs.
Do I think an EV microcar revolution is coming to the US? No. There's zero evidence of that. American consumer preferences would need to change first.
Fickle human behavior is an X factor in any market.
Preferences can change however. Pretend Apple comes out with iCar, a sleek electric microcar or Costco introduces Kirkland CarTwo, a practical second car that charges in a few hours on a normal outlet. Perfect for teenagers and easy to park in small spaces. Cost? $89/month for 48 months.
I basically just pitched the Geely Panda Mini EV or a number of similar cars which have been in production for years. The tech is here. The American preferences are not. Not yet.
- sitkack 2y agoI like your analysis. I'd like to ignore American Consumer Preferences and talk about engineering examples. Linux/OSS/MySQL: These were seen as toy alternatives to the real thing. Linux eventually displaced all the proprietary Unix operating systems. And it still isn't at feature parity with some of those OSes decades later. Same goes for X86 and Arm. High margin stagnant businesses often get consumed by a toy entrant that crosses that inflection point where it does what it needs to do for 20% of price. When the cost of something is less than your margin, you are screwed. On the ACP in regards to vehicles. Americans have been conned into liking low-end vehicles wrapped in a high-end sheen. SUVs are high margin vehicles partially because they are cheap pickup trucks. US auto manufacturers got their asses handed to them imports from Japan, where people did prefer smaller, lighter more efficient vehicles. There was then an effort across all auto companies to change the tastes of US car buyers so that foreign vehicles couldn't compete. # Semantic Scholar links for the paper, "Experimental evidence for tipping points in social convention" https://www.semanticscholar.org/paper/Experimental-evidence-for-tipping-points-in-social-Centola-Becker/6e40cc15bfb37e9958b4a49069a8f852e7632d01 https://www.semanticscholar.org/paper/Experimental-evidence-... https://www.semanticscholar.org/paper/Supplementary-Materials-for-Experimental-evidence-Centola-Becker/45a79b2370b4a3b0faf8556d6ef3a2a0e5f67762 https://www.semanticscholar.org/paper/Supplementary-Material... ---- Evolution of opinions on social networks in the presence of competing committed groups https://pubmed.ncbi.nlm.nih.gov/22448238/ https://pubmed.ncbi.nlm.nih.gov/22448238/
- kristopolous 2y agoLinux is a different story. I've got an hour long talk with about 70 or so slides that talk about it https://siliconfolklore.com/linux-corrections https://siliconfolklore.com/linux-corrections