[H]omer <spam@xxxxxxx> espoused:
> Verily I say unto thee, that Roy Schestowitz spake thusly:
>
>> | Actually, because the number of units sold was not as high as we
>> | hoped, the loss was better than our original expectation."
>> `----
>
> LOL! That's the funniest spin I've ever read!
>
> To paraphrase ... "We made less loss, because we made less sales".
>
> That guy should get an award.
>
This is the problem with production engineering, though, and the
cost and margin curves which go with it. It's pretty much impossible to
price a product so that if you only ever sell one you'll recoup the
whole of the design, development, machine-tooling,
supply-chain-building, wholesaling and retailing costs, since the first
PS3 would probably have to cost, well, let's guestimate, US$50 million.
Obviously, nobody would be buying that particular machine. Of course,
subsequent machines could be sold at a rather lower price...
So, you have to price at a point at which, against given sales
projections, you start to have a positive margin at some *predicted*
point in the future. I think the retail electronics industry these days
looks at about 8-14 months for break-even to positive margin, but even
then, there is a barrow-load of variables; Sony were certainly hit by
blue-laser problems, for example, which didn't really help their case.
Selling fewer boxes to begin with, therefore, could've been an
advantage, if they were expecting manufacturing costs to fall fairly
soon, in which case they could drop their retail prices and sell more
boxes and still expect an earlier break-even point.
Hopefully this is easier to understand than wind-blows-object-it-moves
which seems to cause all kinds of problems here... :-)
--
| Mark Kent -- mark at ellandroad dot demon dot co dot uk |
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