Amazon and Google are undermining the prices of mobile devices and it can hit all
The moment Google introduced Nexus 4, Nexus 10 and the updated Nexus 7 in October was perhaps a crescendo in changing the Android ecosystem, which began with the Amazon Kindle Fire breaking through to the market in 2011. Along with Amazon’s expanded line that includes several Kindle Fire HD, and lower prices for the original Fire, the two largest players in the mobile world now have devices that sell at the lowest price and make money on content. At first glance, this may look good, but it is a bad omen for competitors who really cannot answer the same - and this can undermine the value of diversity and innovation, which we should value as fans of technology.
Consumers have nothing to complain about. How can you compete with Nexus 7 for $ 199 with its large storage, high-resolution screen and the latest OS? With the unlocked Nexus 4 for $ 299, which costs even less than half the price of any other comparable device, or with the Kindle Fire for $ 159? If price is the main factor, then you can not. Parents who want to give each child a new tablet or smartphone, at the price of Nexus 4, will not be able to buy anything besides iron and software obsolete for two years, and they have no particular choice. Amazon and Google do us a favor by democratizing mobile technology.
However, junk prices set clearly unrealistic expectations. We are now in a state where a contingent of tablet buyers has already formed, who think that a 7 inch tablet with WiFi for $ 249 is already too expensive, even if only a few (if any) iron producers can correspond to this state of affairs and remain afloat. Acer received a lot of criticism for its Iconia Tab A110 at $ 230 for not matching the Amazon or Google offer, and this despite the fact that its very filling indicates that the manufacturer cannot sell it cheaper without roll in losses.
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And it can even be said about the iPad mini,persona tabula non grata among the entire crowd - regardless of possible differences in quality, camera, screen size or no ads. Even Apple lowered the profit rate with a price of $ 329, which can be considered an unforgivable sin for this company, partly because the profit rate for it was always in the first place.
You can see what problems this will create in the long run. This strategy effectively misses the whole cycle of traditional price cuts as production becomes more efficient, but prepares the legions of consumers to take such a jump in value as absolutely normal and suitable for the entire industry. But this is not the case and you can see it in the prices of devices that were released just a few days ago. Imagine how Samsung feels when it releases the Nexus 10 and in some functions it surpasses the Galaxy Note 10.1 and at the same time is $ 100 cheaper. Had Nexus 10 already been on the market now, Samsung would have had problems justifying a very competitive price for the Note 10.1 at $ 499 in another situation. Yes, ASUS makes a good profit from the deal with Google, but the fact that the company delivers a million Nexus 7 tablets per month leaves little doubt that the “older” tablets (and more profitable) of the Transformer Pad Infinity type are currently pushed deep on background. Competition in the mobile field is already quite difficult, when most top buyers automatically choose the Galaxy S III or iPad. It is further tightened due to the fact that the remaining people demand that companies sell their products at a price that is not realistic.
The year of following such a strategy, the year of pressure on prices and opposition to everything else, was able to undermine competition. At least, until this summer, Amazon was the actual leader of the Android tablet market, while electronics makers such as Samsung could not win any significant share. HTC and LG left the market mainly because of the mediocre offer, but it’s hard to see how both companies are looking for a safe zone between high-end offer and ruthless low-end. RIM barely had enough time to lower the prices on the BlackBerry PlayBook to a minimum level before the arrival of the Kindle Fire (which is done at the same factory as the PlayBook) and demand dropped again. Most of those who remained, exist in extremes, this concerns the Barnes & Noble Nook line in the public sector or the Samsung Galaxy Note 10.1 at the top. In the area of ​​smartphones, the Nexus 4 is admittedly unlikely to rock the boat much, as the T-Mobile operator may dictate the price and access conditions. Nevertheless, we still do not see steady sales of advanced Nexus phones at low-end prices, and it’s hard to say whether LTE and additional storage space will be an advantage over Optimus G or its direct competitors.
Such exits and strategy changes, in turn, affect innovation in the long run. This does not just affect the number of companies remaining in the market - it affects the amount of resources that survivors can invest in future developments. If profits are reduced and the only real success comes from extra-cheap devices, such as the Nexus 7, then there are fewer and fewer opportunities to play technological explorations that may not be justified. Samsung in the current environment has developed a tablet with a screen resolution of 2560x1600 and the latest processor. Will the company be able to deal with risks as easily in conditions of lower profits? This is not certain. To some extent, we have seen this effect on the traditional PC market. Before tablets or Ultrabook took the market, many PC vendors were involved in race to the bottom (race for survival), where competition was possible only through cheaper components, and not a breakthrough in design. The priority of low prices over everything else was costing Acer both market share and money — until the company changed and became more concerned with quality. We don’t want Amazon, ASUS, LG or Samsung to face a similar dilemma in the mobile world.
Asking Amazon or Google to simply stop making Kindle Fire and Nexus devices to “save” the industry would be very naive, not even mentioning that we will provide a disservice to those who really need such prices or software. But there is a feeling that companies and we, consumers, should move away from the edge. Tablet makers producing a full range of break-even devices can ultimately clear the market for those who either give a winning formula at the right time (Apple) or have large content stores and bank accounts to voluntarily give up most of the potential iron ore »Profits (Amazon and Google). The subsidy approach can be even more volatile - it’s only successful as long as the whole business is successful, which is not very encouraging in light, for example, that Amazon’s recent quarters were not very successful. And as for us, buyers? We need less kneeling before price. An increase in the price of $ 50 or even $ 100 is not the end of the world, if it is the pay of any normal company for staying in business, especially considering that we still get more functions for it.
These are not excuses for really high prices and devices like the iPad mini that still belong to this camp. But when even low-end manufacturers, such as Acer, cannot enter the market and not be criticized, it is time to reconsider our priorities. Principles such as choice and quality, which we should love as a junk gadget, will survive, if only we allow them to do so. Instead of creating a culture that makes only very cheap or very expensive devices available, we should just relax and buy what is really good as long as we can afford it. If the manufacturers of phones and tablets count on equal competition, we will all win.
Linus Torvalds in his style aptly commented on the article : Editors Engadget really stupid? Or just corrupt? Or just troll us?
Here is another article about the “race for survival”, this time in the form of editorial from Engadget. And she is more idiotic than usual.
The whole concept of “race to the bottom” looks strange to me: people complain that technologies are becoming less expensive and more accessible to all. How can this be bad? The whole argument is fundamentally erroneous from the very beginning - every time I see, when some scientist or general director complains that the competition makes things cheap, I think “ooh, crybaby.”
But when it comes to mobile phones, this is not just a stupid argument, it is doubly stupid. Because in this market, especially in the USA, the alternative is the completely non-working model of operator subsidies, with all that it implies. None of them is good and everything is worse than any (hypothetical) argument of a “race for survival”.
...
At the same time in this article, the lock operator is not mentioned at all. But the Nexus smartphones promote the “no carrier lock-in” model, and the price is one of the unconditional components.
Consumers have nothing to complain about. How can you compete with Nexus 7 for $ 199 with its large storage, high-resolution screen and the latest OS? With the unlocked Nexus 4 for $ 299, which costs even less than half the price of any other comparable device, or with the Kindle Fire for $ 159? If price is the main factor, then you can not. Parents who want to give each child a new tablet or smartphone, at the price of Nexus 4, will not be able to buy anything besides iron and software obsolete for two years, and they have no particular choice. Amazon and Google do us a favor by democratizing mobile technology.
However, junk prices set clearly unrealistic expectations. We are now in a state where a contingent of tablet buyers has already formed, who think that a 7 inch tablet with WiFi for $ 249 is already too expensive, even if only a few (if any) iron producers can correspond to this state of affairs and remain afloat. Acer received a lot of criticism for its Iconia Tab A110 at $ 230 for not matching the Amazon or Google offer, and this despite the fact that its very filling indicates that the manufacturer cannot sell it cheaper without roll in losses.
')
And it can even be said about the iPad mini,
You can see what problems this will create in the long run. This strategy effectively misses the whole cycle of traditional price cuts as production becomes more efficient, but prepares the legions of consumers to take such a jump in value as absolutely normal and suitable for the entire industry. But this is not the case and you can see it in the prices of devices that were released just a few days ago. Imagine how Samsung feels when it releases the Nexus 10 and in some functions it surpasses the Galaxy Note 10.1 and at the same time is $ 100 cheaper. Had Nexus 10 already been on the market now, Samsung would have had problems justifying a very competitive price for the Note 10.1 at $ 499 in another situation. Yes, ASUS makes a good profit from the deal with Google, but the fact that the company delivers a million Nexus 7 tablets per month leaves little doubt that the “older” tablets (and more profitable) of the Transformer Pad Infinity type are currently pushed deep on background. Competition in the mobile field is already quite difficult, when most top buyers automatically choose the Galaxy S III or iPad. It is further tightened due to the fact that the remaining people demand that companies sell their products at a price that is not realistic.
The year of following such a strategy, the year of pressure on prices and opposition to everything else, was able to undermine competition. At least, until this summer, Amazon was the actual leader of the Android tablet market, while electronics makers such as Samsung could not win any significant share. HTC and LG left the market mainly because of the mediocre offer, but it’s hard to see how both companies are looking for a safe zone between high-end offer and ruthless low-end. RIM barely had enough time to lower the prices on the BlackBerry PlayBook to a minimum level before the arrival of the Kindle Fire (which is done at the same factory as the PlayBook) and demand dropped again. Most of those who remained, exist in extremes, this concerns the Barnes & Noble Nook line in the public sector or the Samsung Galaxy Note 10.1 at the top. In the area of ​​smartphones, the Nexus 4 is admittedly unlikely to rock the boat much, as the T-Mobile operator may dictate the price and access conditions. Nevertheless, we still do not see steady sales of advanced Nexus phones at low-end prices, and it’s hard to say whether LTE and additional storage space will be an advantage over Optimus G or its direct competitors.
Such exits and strategy changes, in turn, affect innovation in the long run. This does not just affect the number of companies remaining in the market - it affects the amount of resources that survivors can invest in future developments. If profits are reduced and the only real success comes from extra-cheap devices, such as the Nexus 7, then there are fewer and fewer opportunities to play technological explorations that may not be justified. Samsung in the current environment has developed a tablet with a screen resolution of 2560x1600 and the latest processor. Will the company be able to deal with risks as easily in conditions of lower profits? This is not certain. To some extent, we have seen this effect on the traditional PC market. Before tablets or Ultrabook took the market, many PC vendors were involved in race to the bottom (race for survival), where competition was possible only through cheaper components, and not a breakthrough in design. The priority of low prices over everything else was costing Acer both market share and money — until the company changed and became more concerned with quality. We don’t want Amazon, ASUS, LG or Samsung to face a similar dilemma in the mobile world.
Asking Amazon or Google to simply stop making Kindle Fire and Nexus devices to “save” the industry would be very naive, not even mentioning that we will provide a disservice to those who really need such prices or software. But there is a feeling that companies and we, consumers, should move away from the edge. Tablet makers producing a full range of break-even devices can ultimately clear the market for those who either give a winning formula at the right time (Apple) or have large content stores and bank accounts to voluntarily give up most of the potential iron ore »Profits (Amazon and Google). The subsidy approach can be even more volatile - it’s only successful as long as the whole business is successful, which is not very encouraging in light, for example, that Amazon’s recent quarters were not very successful. And as for us, buyers? We need less kneeling before price. An increase in the price of $ 50 or even $ 100 is not the end of the world, if it is the pay of any normal company for staying in business, especially considering that we still get more functions for it.
These are not excuses for really high prices and devices like the iPad mini that still belong to this camp. But when even low-end manufacturers, such as Acer, cannot enter the market and not be criticized, it is time to reconsider our priorities. Principles such as choice and quality, which we should love as a junk gadget, will survive, if only we allow them to do so. Instead of creating a culture that makes only very cheap or very expensive devices available, we should just relax and buy what is really good as long as we can afford it. If the manufacturers of phones and tablets count on equal competition, we will all win.
Linus Torvalds in his style aptly commented on the article : Editors Engadget really stupid? Or just corrupt? Or just troll us?
Here is another article about the “race for survival”, this time in the form of editorial from Engadget. And she is more idiotic than usual.
The whole concept of “race to the bottom” looks strange to me: people complain that technologies are becoming less expensive and more accessible to all. How can this be bad? The whole argument is fundamentally erroneous from the very beginning - every time I see, when some scientist or general director complains that the competition makes things cheap, I think “ooh, crybaby.”
But when it comes to mobile phones, this is not just a stupid argument, it is doubly stupid. Because in this market, especially in the USA, the alternative is the completely non-working model of operator subsidies, with all that it implies. None of them is good and everything is worse than any (hypothetical) argument of a “race for survival”.
...
At the same time in this article, the lock operator is not mentioned at all. But the Nexus smartphones promote the “no carrier lock-in” model, and the price is one of the unconditional components.
Source: https://habr.com/ru/post/157411/
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