on 3/30/03 9:30 PM, Kim Flint at email@example.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 >is > 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 worthwhile 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 and built, but once they've been spent a rational company shouldn't be considering them with respect to ongoing production. On the other hand, they 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 costs. 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. Mark 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 EDPs. 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 does, however, open the door to future software upgrades that exploit the improved processing power. On the other hand, I don't know that it would make economic sense for Gibson.