CS70 wrote:Well, my $.10 is that for software, as with recorded music, a big reason is piracy.
Nothing would be simpler than to stop 'illegal' copying of SW - the big boys in the SW game don't want to, so it doesn't happen. In the DAW market, Logic and Reaper are to all intents and purposes free. Most Adobe stuff was free for ages and ages (just password protected), now it is CS705 a month for everything, from soup to nuts and from arsehole to breakfast time.
Software is cheap, because it carries no marginal cost. In software, the zero-margin society existed from day-one.
I am sure that if Apple thought that it could get away with it, it would bundle Logic and FCP with every Mac totally free.
CS70 wrote:When it comes to the hardware, imho that's just a temporary condition; the (long term) perspective on prices is to rise. That's because on one side, price pressure is due to competition in a growing market; on the other, prices have been affected by the disruptive effect of a single sourcing point (China). China has increased its industrial capabilities enormously on the last decades, while at the same time being capable of immense amount of industrial output - it literally changed the world. It's gonna last for a while, but sooner or later companies pricing their kit too low will not stay viable and disappear, and there will be fewer players and steady prices (albeit probably lowish, so long accessible manufacturing places at "Chinese" prices keep existing). It's interesting to note that there are other regions (India, for one, but big blocks of East Asia as well) with similar potential capabilities, still unrealized - both in terms of potential output and industrialization; they too are progressing towards the Chinese model - and could replace China even when it stops being as inexpensive as it is now. So how long the "while" is depends on how fast China prices rise and how fast these other countries catch up and replace Chinese capabilities.
Absolutely and totally not going to happen.
China is in competition with dozens of other countries, think of India, Malaysia, Vietnam, Rumania and Ukraine and don't forget that much of production is being repatriated to the US and Germany. As more and more integration and automation kicks in, labour costs pale into insignificance, compared to technical education levels and proximity to market.
Developing countries are pouring money into technical education, Vietnam's educational budget is 7% of GDP.
China is not just fighting off the developing world. A few countries in Europe are piling into technology. Educational spend in Denmark and Finland are at almost 9%, Norway 7% (UK 5%).
We are moving into a zero-margin society.
It is irrelevant if an automated production line (stamping out boxes containing five chips and an EPROM) is sitting in Texas or China, Scunthorpe or Shanghai.
And what little hardware is left, is rapidly being replaced by software on universal devices, such as computers, pads and phones. In the consumer markets, the tape recorder and the holiday-snaps camera are gone. The cheap video camera has gone and the VCR/DVD player is almost gone. Next to go will be the television, followed by the broadcasters.
Once the television has been replaced by a universal viewing device with direct access to the internet and Netflix, production companies will no longer have to go cap-in-hand to the broadcasters. The gateway function of broadcasting will vanish, just as the big labels disappeared in the world of music.