Linked by alcibiades on Tue 30th May 2006 20:40 UTC
In the News Dell and its business model has been the focus of a lot of comment on Apple oriented forums in recent months. The Dell model is said to be unviable, and Dell's recent news is said to prove this. A limited endorsement of sorts for the so called "end to end model" in music has been published by Walt Mossberg in the WSJ. Recently a real sky-is-falling article with this theme has appeared here. This is a subject that matters. If the advocates of the so-called "end to end model" are right, it implies that the industry structure which allows us all to source hardware from wherever we want, and run a variety of OSs on it, is in danger.
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cr8dle2grave
Member since:
2005-07-11

No offense, but I'm having a very difficult time making much sense of your comment. I'll try and respond insofar as I can.

Commodity markets overtake non-commodity markets because they're a more sensible business model.

Yes and no. Commodity markets don't necessarily make more sense to producers. Producers generally fight commoditization over the short term. Consumers though are greatly advantaged by commodity markets, which represents the economic pressure that normally leads to commoditization.

Unfortunately, our elections prove that consumers don't make their choices based on those reasons. Comfort, price and inertia play a larger role in those decisions.

Are you speaking of rational choice models? Genreally speaking, I have a lot of objections to rational choice theory (although it is a useful assumption for constructing certain models).

Either you have to accept these facts and adjust your understanding of markets accordingly or make up some "people won't stand for this forever, you know!" response that dismisses it. Pick the more intellectually honest one of the two.

Nothing I've said ignores the fact of Apple's present dominant status. Instead I've presented the opinion that, absent a change in position over the licensing over FairPlay, they will eventually fail.

Music players aren't computers. They don't adhere to any platform and so far there hasn't been a reason for vendors to adopt one. They don't have to be built to a particular set of specs and run a familiar OS, so your comparison of consumers to CIOs is nonsensical.

Sorry, I can't make sense of what you're saying here.

If you truly believe building an OS to the widest distribution of hardware available is a market-building strength, look at Linux and Microsoft. One OS has to reverse engineer chipsets and the other's vendor has to sign NDAs with the manufacturers of those chipsets. It's a technical nightmare at times.

And yet that business model, whatever technical difficulties it may involve, represents well over 90% of the entire market. I'd say the market has chosen a winner.

Your other fallacy is extrapolating long term trends from short term trends.

Please point out to me one single instance over the last century of a commodity market which has shifted to a non-commodity market. (hint: there isn't one)

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