Pricing for Ubiquity
November 1, 2011 9:35 AM
Do you remember classic case study of technology provider slashing prices despite costs to drive high volumes and innovation immediately?
I have been trying to remember the story of technology provider (maybe RCA, GE, ...) cutting the price of their new innovation (maybe transistors) very quickly to fraction of their costs at the time.
The idea was that low prices would create high demand, which would force further innovation in manufacturing and drive down the costs very quickly.
I think this is classic business school case study, but I don't remember enough details to find the full story.
I have been trying to remember the story of technology provider (maybe RCA, GE, ...) cutting the price of their new innovation (maybe transistors) very quickly to fraction of their costs at the time.
The idea was that low prices would create high demand, which would force further innovation in manufacturing and drive down the costs very quickly.
I think this is classic business school case study, but I don't remember enough details to find the full story.
You're talking about Microsoft.
posted by Chocolate Pickle at 11:29 AM on November 1, 2011
posted by Chocolate Pickle at 11:29 AM on November 1, 2011
I should probably amplify that: You're talking about MS-DOS.
posted by Chocolate Pickle at 11:30 AM on November 1, 2011
posted by Chocolate Pickle at 11:30 AM on November 1, 2011
I don't think that I'm talking about MS-DOS, but something earlier than that and something that had an actual manufacturing cost (vs. software).
posted by zeikka at 11:35 AM on November 1, 2011
posted by zeikka at 11:35 AM on November 1, 2011
Not much of an answer but in the early 1980's DRAM chips were sold, at what was claimed to be, uneconomic prices by Japanese and Korean manufacturers in an attempt by each set of manufacturers to gain dominance in that business.
I've struggled to find a reference to this (perhaps because DRAM is a pretty difficult thing to google for) but there is an oblique reference here http://en.wikipedia.org/wiki/Mostek#The_decline_in_the_face_of_Asian_competition .
As far as I recall there were US manufacturers (or at least involved in the DRAM supply chain) who tried to get the US Government to do something about but nothing much came out of it - a downside for them but an amazing upside for consumers of the time who saw memory prices go through the floor.
Don't refer to this without cross-checking as my memory (ha!) may be faulty but I'm reasonably sure that's what happened.
posted by southof40 at 2:13 PM on November 1, 2011
I've struggled to find a reference to this (perhaps because DRAM is a pretty difficult thing to google for) but there is an oblique reference here http://en.wikipedia.org/wiki/Mostek#The_decline_in_the_face_of_Asian_competition .
As far as I recall there were US manufacturers (or at least involved in the DRAM supply chain) who tried to get the US Government to do something about but nothing much came out of it - a downside for them but an amazing upside for consumers of the time who saw memory prices go through the floor.
Don't refer to this without cross-checking as my memory (ha!) may be faulty but I'm reasonably sure that's what happened.
posted by southof40 at 2:13 PM on November 1, 2011
This thread is closed to new comments.
posted by Cool Papa Bell at 9:38 AM on November 1, 2011