| From: | TopCat <topcat@******.net> |
|---|---|
| Subject: | Re: Killing in Shadowrun... |
| Date: | Sat, 25 May 1996 14:39:33 -0500 |
>few months. Demand stayed high for a long time, therefore so did prices:
>the chips were selling as they came out of the fabs. All of a sudden, a
>few companies cut inventory and sold stock cheaper than market price,
>because they had bought more than they needed. Suddenly the price fell
>like a concussed falcon. I should know, I built my PC two weeks ago and
>the memory chips - 8 megs of EDO RAM - cost me half what I'd been quoted
>a few months before.
The reason why computer-related advances don't lead to sustained higher cost
is simply due to the state-of-the-art. The marketing companies know what
the market will bear for any item in relation to it's impact on it's market.
Fifteen years ago, a pentium chip would have sold for millions, because it
would have been far and away the state of the art. I think we paid over
10,000 dollars for our first computer back in 1982 (an IBM PC with an
external 20 meg hard drive/tape drive that was larger than my home stereo
system's amplifier now). I can't be sure, might be more, might be less (I
was only 9 years old at the time we got it). But it was state of the art
for 1982. As the SOTA advances, the not quite SOTA becomes drastically
cheaper. It can drop in price dramatically over a very short rate of time
depending on how fast advances are made. That's why prices drop, because
they are no longer the SOTA. They do not drop due to overproduction except
in rare cases where the corp loses it's mind (the comics industry is a good
example of that and SOTA has had something to do with that as well).
>And the prices on most components don't vary by more than about 20%,
>until you get to serious brand-names on assembled boxes. Compare the
>price of a 3.5" EIDE 1.2gigabyte hard disk and see how much it varies:
>not by much.
But how much was a 1.2 gig hard drive around 4 years back? How much will it
be worth four years from now? SOTA will determine the price. Not whether
or not the company made too many of them.
>Raise the price in a cartel, and it becomes economic for someone to drop
>their prices and grab market share: the more participants, the more
>chance this will happen. It also becomes worthwhile for new players to
>enter the market and undercut you.
A new player comes into the market and he's charging less for his stuff than
the Big 8. First, they'll maybe make it maybe a month before they're bought
up. Second, during that month, they'll get no market share, despite their
better prices. Why not? I mean, it'd only make sense that they're selling
the product cheaper, they should get more biz. Because of marketing. A
tiny little newbiecorp can't hang with the big dogs in marketing. See
Microsoft for a good example and then realize that they're still nowhere
near the level of a megacorp in 2057.
>>I'm not talking Sidewinder missiles, I'm talking nearly everything under the
>>sun. Missiles have a limited market. Militaries want them. There are much
>>fewer militaries out there than there are people who want canned vegatables
>>or cybereyes. In a limited market, costs will be much closer to base, the
>>demand is lower. In high-volume markets, cost will soar above base value
>>because the demand is far greater.
>Provided supply is exceeded by demand. And that high margin is a "come
>play in the market" call to any entrepreneur around. What happened
>during the period of high DRAM prices? Everyone built fabs to make more
>DRAM. Result, overproduction and a price crash. If DRAM isn't a
>commodity, then what is?
DRAM became cheaper due to the NEED for more memory in computers and the
refusal of many buyers to dump the cash to upgrade. It was stalling the
market. Most memory manufacturers realized this and they dropped their
prices, because a lesser share of a huge market means a lot more cash than a
bigger share of a tiny one.
>>>For consumer goods, maybe. For weapon systems, no. Too small a market,
>>>*way* too sensitive an issue. In fact, many UCAS weapons would *have* to
>>>be designed in-house: those Ares aircraft are great, until Ares decides
>>>to cut off spares. Look at Israel/France in 1967 for a perfect example.
>>
>>Exactly, but I'm not talking strictly weapons systems.
>
>You're going to have trouble using canned vegetables as a lever in
>negotiations :)
Iraq needs everything they can get right now due to trade sanctions imposed
by the UN. Just last week, the UN decided to let them sell 1 billion
gallons of oil each month in exchange for food and medical supplies. Until
then, they weren't allowed to sell anything at all. Their economic and
political structures nearly cracked. If a country like the UCAS ever
started treading on corporate toes with shows of military or any other type
of might, they'd get sanctions imposed on them by the Corporate Court (which
exists to serve corps also, remember?). Now they don't get anything from
the megacorps. Renraku shuts down the telecommunications systems within the
UCAS. Fuchi turns off their cold fusion reactors. No power, you say? No
communications, you say? Corps decide that they won't sell their food
supply off to the UCAS for a while, you having problems with food riots?
Now, what was this about a show of power? Corps rule the world in 2057 and
they know it. So does the rest of the world.
-------------------------------------
"I was thinking of the immortal words
of Socrates, who said: I drank what?"
-- Real Genius
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TopCat at the bottom...
