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Re: Dell and Microsoft Kiss Under the Table?

Erik Funkenbusch wrote:

> On Sun, 09 Oct 2005 18:23:16 +0100, Roy Schestowitz wrote:
>>> I suspect the reason for the lower price is that the windows machines
>>> are sold in mass quantity and the "Open PC" models are somewhat
>>> non-standard at the moment. Both manufacturing and support are
>>> different than usual for Dell so this might explain the price
>>> difference.
>> I don't buy your argument; sorry about that...
>> Toss hard-drive down the bin, bundle empty Maxtor hard-drive to package.
>> Now, was that _so_ hard? If the will is there, practical changes will
>> follow.
> You really don't undestand the manufacturing business, do you?
> There are a set amount of costs in any large manufacturing process just to
> start the process.  Those costs have to be built into the expected number
> of machines sold.  If it costs $100,000 to setup, and you expect to sell
> 1,000,000 of that product line, that that's a cost of 10 cents added to
> each PC. If, however, you expect to sell 1,000 then that's a cost of $10
> added to each PC.
> I dont' know what Dell's costs are, but you have to figure R&D (the
> machines are uniquely designed, they're not just rebadged machines from
> other lines), Training (in the shop floor, sales, and support), Marketing
> (while they don't seem to be doing a lot of marketing for the n series,
> they have to have web pages designed, brochures printed, etc..).
> All those costs are amortized over the number of machines you sell, and
> low volume product lines have higher fixed costs than high volume ones.

In your wildest dreams sunshine!

Products are manufactured in bulk as if there is no tomorrow
in places like China.
Then they are sold as if there is no tomorrow.
Because there isn't any tomorrow for factories that
don't produce and market in the same breath.
The likes of Dell$ execs just come along on executive shopping
trips into places like China, Hong Kong and Taiwan
and say ye or ne to goods on display.
They can always walk away and find their competitors
armed to the teeth with new products. So they don't,
and sign contracts to buy in huge quantities
trying to drive the price lower and lower.

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