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Re: Orvilles to replace EDPs?

on 3/30/03 9:30 PM, Kim Flint at kflint@loopers-delight.com wrote:

> It doesn't matter though. Again, price is set by the market, not the
> manufacturing cost. Profit is affected by manufacturing costs, but that 
> the manufacturer's problem, not the consumer. Price is set by the market,
> and it appears that in this case the market is willing to spend more than
> you. You seem to find this upsetting.

More specifically, price is set by what consumers are willing to pay.

Manufacturing costs may affect whether or not that price makes it 
to produce the item. So, manufacturing costs will set a lower bound for an
ongoing product but they won't set an upper bound.

Development costs will affect whether or not a new product gets designed 
built, but once they've been spent a rational company shouldn't be
considering them with respect to ongoing production. On the other hand, 
are very relevant when looking at doing future product development.

"Hey, let's build a new looper!"

"How much did it cost to develop the last one? (This is an approximation to
what the new one might cost to develop.) How many can we sell? How much
money will we make per unit?"

Take those answers and you can calculate return on investment. If ROI isn't
high enough, it's hard to justify a company pursuing it. There are less
tangible benefits like research experience, customer base evolution, etc.
but those are more difficult cases to argue.

So, if one wanted to see a new looper you would need to show at least some
of the following:

* Development costs could be kept very low

* Profit per unit would be high -- and in the case of a company with an
existing product higher than the current profit per unit to make

Furthermore, for a company with an existing product, you need to show that
the new product will make enough more money to offset the development 

Another thing that will drive innovation is competition. One reason to
innovate is that an existing product is having trouble competing. On the
other hand, if the total market is too small, then it may be more cost
effective just to abandon the market after the existing product reaches the
end of its marketable life.


P.S. Without being involved in the Echoplex, my guess for a lowest cost
evolution path would be:

* Upgrade from a 68000 to a later 680x0 series processor. This should allow
it to address more memory.

* Upgrade any really old components.

* Go to stereo. Not dual loops, but just stereo. This means changing the
software to process two samples wherever it processes one but leaves the
overall control structure in tact.

* Raise the standard memory to make stereo viable.

* Raise the price to something less than twice the cost of two current 
Given psychological effects, it would seem good to make it come in just
under $1000 street price.

This is not a dramatically new box. It's still a lot of electrical
engineering work, but it preserves most of the software investment. It 
however, open the door to future software upgrades that exploit the 
processing power.

On the other hand, I don't know that it would make economic sense for