Wednesday, October 29, 2008

In the market for consumer goods, the speed of releasing new models reins

Sydney's weather is as unpredictable as usual, four seasons in a week becomes a norm. Does that imitate what current economic situation is like?

Buying a new Sony laptop at moment, and again dazzled by the varieties and models this greatest electronic gadget maker offers. Dazzled as Sony slabs are as stylish as usual but most importantly also confused as a noticeable portion of models are priced differently despite almost-identical look-and-feel and very similar in specs.

Almost true for any electronics, consumers tend to wait after a new model coming out. They wait for the price to drop as it usually drops after a few months when the new becomes old while the old is no big different from the new. In a fiercely competitive market where price can only go down, how does a company maintain a healthy margin while not wasting their assembly line erected for a new model? They create a bunch of models through the same assembly line with a little tweak to the shape and specs. Then drop the price for one for sale while releasing another claiming a new model has born.

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