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You could take the Engadget article as a defense for the iPad Mini pricing, or you could say it illustrates that it is tough to compete with companies who can s

• hyperbovine 14y ago
  Sorry, I must be missing something -- isn't AAPL, the company furthest away from selling anything at cost, the most valuable company in history and making more money in a week than most of these other companies make all quarter?
  • duaneb 14y ago
    Not everyone can make luxury hardware.
  • seanmcdirmid 14y ago
    They have incredibly great logistics, they have made lots of forward looking investments. It is difficult for competitors to produce similar devices at similar costs to Apple, and their margins are much crappier when they do. But they should catch up, as long as Apple stops improving logistics and making forward looking investments (or the competitors do).
• esolyt 14y ago
  Yes. It is difficult to compete with companies who can sell devices at cost. But as a consumer, I don't see why I should be unhappy about it.
  • alpeb 14y ago
    The problem is over the longer term. Competitors will have to exit the market, creating a monopolistic situation with all the problems that entails.
    • cdash 14y ago
      Competitors that can not compete are not competitors.
      • HCIdivision17 14y ago
        And a competition with only one competitor is Solitaire. Unfortunately, these types of large markets play continuous/repeating games, not one-shots. Ideally, consumers wouldn't want to waste the time it takes for a monopoly to become complacent and be disrupted by a fresh competitor. We can be fairly confident that if the market's inefficient (as it hopefully is in a monopoly), someone would certainly jump in and try to eat that inefficiency as profit for themselves and compete. But that takes time. Rather, we'd prefer the competition play out continuously. There's overhead in time and wasted opportunity waiting for these games to restart, when we could have been incrementally improving the whole time (say, a lost product cycle or two: 18-36 months maybe?). In this hypothetical ideal, the immediate cost to maintain this competition is higher to the consumer, but cumulatively lower in the long term since we gain though the innovation and efficiency forced by active competition. Of course, we can certainly think of Solitaire as a one-person competion, but most companies don't have the wherewithal to actively compete against themselves (there are a few really awesome counter-examples, but they're at least partially awesome in light of how much everyone else fails to live up to that ideal). It's much easier to cheat: take the short-term pay-off since no-one is available next round to punish. Lacking alternatives, the consumer can't even properly punish the monopoly for cheating, and will instead have to either pay higher costs or accept passive innovation as the company coasts (or abstain, becoming a noncomsumer and shrinking the market - a worst-case scenario!). Or worse, they drive their efficiencies enough that none may even afford to enter to compete, and since there won't be competition next round, the consumer faces all the same negatives and a much lower hope of competition-driven innovation/cost reduction for the round after that. Now the best hope is a hidden competitor with the funds to jump in suddenly and without warning with a fully formed alternative (say, an iPhone perhaps); this happens rarely, and will likely take years to prepare. TL;DR: When you're the only player, no one is there to stop you from cheating. And the consumers are paying for the game. That's why monopolies are lousy: consumers can't compete, but are still invested players - albeit disenfranchised.