Results 1 to 17 of 17
Like Tree9Likes
  • 6 Post By reggieb
  • 1 Post By C-Note
  • 2 Post By Kujila
  1.    #1  
    So, there has been a lot of talk about a few topics on this board that have been bugging me. I am going to not try to sound arrogant, I just want to explain a couple of concepts quickly. I love econ and teaching, so this is going to be a quick econ lesson, with the TP as an example. If you think this sounds boring, or if you find some of my posts preachy, you should probably leave. You have been warned. Feel free to read if you want, and flame me, I am not too worried about it.

    So, a lot of people are upset that they didn't get a firesale priced TP. I really wanted one, too, and returned my to BB before they announced that they would price match, I didn't expect that policy, so kudos to BB, and bad on me. What can you do? A lot of people seem to feel that they are entitled to have received the TP, either they were old home brew developers, or a long time webOS fan, or whatever. THEY were entitled to the TP, and nobody else. Certainly not people that are selling then on eBay. Feelings of entitlement always eat at me. I missed out on the fire sale. I owned a Pre minus way back when they were new. Big deal. Honestly, who cares? Any how, here is what the market looked like on launch day, and this is where the econ lesson begins:

    http://farm7.static.flickr.com/6202/...c5ece77e_z.jpg

    This is what the market looked like, we now know that the supply of the TP was vertical, there was some number, we still don't know exactly what, but some number X in the market, and that's all there was ever destined to be. Now we know the following about the original price, from the market response:

    http://farm7.static.flickr.com/6069/...ee76b672_z.jpg

    Now, we know from sales, again, that the original price of $500/$600 was too high. They couldn't sell through the supply. So at the end of the day, quantity demanded (Q sub D1 -apologies, I couldn't get the font size tag to work to make this look better) was higher than the quantity supplied (Q sub S). We know this be true, if they had hit the market's equilibrium price (where supply and demand meet) we would have seen a happy HP, and a happy us, as quantity supplied, and quantity demanded would have been the same. The webOS division, apparently in the dark about HP's maneuverings were trying to find this number, hence the $100 price drop, so that we could find this equilibrium price point

    Then we hit the fire sale, and that price was shifted:

    http://farm7.static.flickr.com/6208/...5894f59f_z.jpg

    Alright, so there is the price shift. The new price, in red, denotes the post fire sale price. I thought that this would, honestly, be closer to the market price. I think HP did, too. They didn't expect what we saw, and that is that the price is now significantly below the market equilibrium price. So now quantity supplied is LESS THAN quantity demanded. So we get shortages. In ANY such market, you will see (sometimes illegal) market equilibrators. An example is ticket scalpers. Another example (a legal one) is any electronic device that launches at (or drops to) a price that is below the market price given the supply at the time lands on eBay.

    Being an existing webOS fan doesn't make you any more entitled than anyone else to getting a firesale TP. Some people are bound to be unlucky. That's the way it is. Nothing to do about it. In fact, the only way for the platform to survive, is if this causes a large group of NEW webOS fans to get the devices and to really like them, but more on that in a minute, next I want to cover demand.

    So, I read a couple people here make the common error that this increased demand for the product, perhaps by the colloquial definition, that's true, but by the economic definition demand DID NOT CHANGE. QUANTITY demanded did, and this is what will matter to potential licensees. A shift in demand would mean that the Demand curve (the line denoted "demand" in my graphs) would have to move right or left. Such a change (absent a shift in supply) will ALSO change the price, but that is a fundamentally different shift. That means that some other thing (marketing being able to shift mind-share is such an example) has caused the market to demand a higher quantity at the SAME OR A HIGHER price (if the demand curve shifts right - ie an increase in demand). A downward shift in the price of an item will ALWAYS change quantity demanded, but that isn't necessarily a good thing for a producer.

    People often talk about the cost of inputs (how much it cost to build a device) and are mad that a device cost a lot more than it costs to make. Cost of inputs has NOTHING to do with price directly, demand and supply create a price, and if that price is HIGHER than the cost of inputs, you can expect that the market niche will be filled by a manufacturer. In other words, the manufacturing decision is determined by the cost of inputs, along with market equilibrium price. Now, it will indirectly affect cost. In the Android market, for example, if Asus is selling a bunch of tablets, and Acer sees they are making money, they determine that they can also sell an Android tablet at this price, and that they can make money because cost of inputs is lower than the market price, they will enter the market. This will shift the supply curve, thus indirectly affecting price.

    This ties back to the original discussion about entitlement, and my comment that it could be BETTER that new users are buying webOS. Again, the production decision is made by Acer because they look at what it costs to make a tablet, they look at market price, and if they can make money, they might enter the market. The act of dropping the price had no affect on demand for the good, more quantity is demanded, again, because the price is low. But NEW USERS THAT NOW OWN THE TABLETS CAN SHIFT THE DEMAND. That is, if for example, HP firesaled 300,000 devices to people that had never used webOS, said users fall in love with webOS, and tell an average of 2 people each that it's WAY better than Android, you could have 900,000 new potential webOS buyers. That would shift the demand curve right:

    http://farm7.static.flickr.com/6089/...80bf7b5c_z.jpg

    Notice the difference? Where Supply and Demand intersect at ANY GIVEN supply with now be at a higher price point. This means that the production decision is more likely to be yes, because cost of inputs is now more likely to be below market equilibrium price. Before, with the fire sale example, the quantity demanded is higher at a lower price, in this example, quantity demanded is higher AT THE SAME PRICE. A much better deal to a manufacturer.

    I hope I explained this clearly. I don't think it's likely to cause a someone to make new webOS devices, mainly I am annoyed at the feelings of entitlement, and I wanted to explain with something other than "Cut it out" why you shouldn't think that way. Still, it is possible that this COULD shift demand, thus making webOS more viable. I know my fingers are crossed. I hope lots and lots of new users beat me to the tablets. I hope the prices on eBay stay high (that would be a clear indicator to suppliers that yes, demand has shifted, and that webOS devices are actually worth more now). But right now, 1. there are shortages, deal with it. 2. Demand hasn't shifted, but 3. This could indirectly shift demand, which could be a good thing, but 4. Only if you quit griping that other people got to the TP before you, a "real" webOS fan, could.
    Blasphemous webOS fan, using Android (with a big phone buying problem)
  2. #2  
    Whew. I'll wait for the movie.

    By the way, you kind of missed the point. MOST said holding SOME over for current users as a goodwill gesture would be a welcome move. I didn't see too many who said that non-users should not get a shot at a device.

    The one thing your chart didn't show was how popular public perception of a company affects sales in the long term. Right now HP's credibility is in the toilet... with investors, developers and mobile customers. A little goodwill couldn't hurt them.
    "Sometimes I feel like an OS-less child..."
    (with apologies to Billie Holiday )
    sinsin07 likes this.
  3. #3  
    Nice lesson....little dry....but nice.....yesterday Tps were sold out an Amazon for 279 each (32 GB).

    Hell, I thought this morning, should I really return my original TP to amazon if I can't ge told of a firesale one? I already like it too much and 2 weeks ago I was sold on it despite the $400 price tag.
  4.    #4  
    Quote Originally Posted by deesugar View Post
    Read it?
    Oh good lord no! I had terrible flashbacks to school just looking at the first graph and decided to chance it with my snarky comment anyway.
    haha, fair enough

    Quote Originally Posted by Macflyer View Post
    Nice lesson....little dry....but nice.....yesterday Tps were sold out an Amazon for 279 each (32 GB).

    Hell, I thought this morning, should I really return my original TP to amazon if I can't ge told of a firesale one? I already like it too much and 2 weeks ago I was sold on it despite the $400 price tag.
    Yeah, it is a tough call. I made the wrong one.
    Blasphemous webOS fan, using Android (with a big phone buying problem)
  5. #5  
    If many new users end up not liking the touchpad, and it loses support from developers, there will be a glut of units and the ebay price will go down in a matter of a few months. Probably to something like $125.

    This is how I buy my cellphones. After the "new" buzz wears off, the ebay price drops pretty fast. I let someone else take the depreciation hit.

    In the case of the Palm Pro, they were so unpopular, I was able to get one, practically brand new, for $150 only 4 months after it came out.

    After 18 months a like-new pre- with touchstone was down to $100. I save a lot of money not being first in line, and in the case of the pre-, there were a lot more apps available by the time I got it..
    Page Plus Cellular - Talk Smart
    Palm M100 > Treo 600 > Treo 650 > Treo 755P > Palm Pro > Palm Pre-
  6. #6  
    So to summarize, by lowering the price and creating the fire sale, awareness increases, and that, in turn may increase demand?
    User of Android, Blackberry OS, WebOS and Windows Mobile (not necessarily in that order).
  7.    #7  
    Quote Originally Posted by untitled View Post
    So to summarize, by lowering the price and creating the fire sale, awareness increases, and that, in turn may increase demand?
    Yes, it's at least possible. I wouldn't go so far as to call it likely, but certainly possible. But that was kind of an ancillary point. The primary point is that at this point, all we know is that quantity demanded has shifted, not demand.
    Blasphemous webOS fan, using Android (with a big phone buying problem)
  8. #8  
    Quote Originally Posted by Johncase3 View Post
    If many new users end up not liking the touchpad, and it loses support from developers, there will be a glut of units and the ebay price will go down in a matter of a few months. Probably to something like $125.

    This is how I buy my cellphones. After the "new" buzz wears off, the ebay price drops pretty fast. I let someone else take the depreciation hit.

    In the case of the Palm Pro, they were so unpopular, I was able to get one, practically brand new, for $150 only 4 months after it came out.

    After 18 months a like-new pre- with touchstone was down to $100. I save a lot of money not being first in line, and in the case of the pre-, there were a lot more apps available by the time I got it..
    i doubt theyd get sold cheap even then, the peopel that were greedy at the start will remain so.
  9. #10  
    Disappointment, worry, regret != sense of entitlement
  10. ap3604's Avatar
    Posts
    139 Posts
    Global Posts
    218 Global Posts
    #11  
    Quote Originally Posted by deesugar View Post
    Read it?
    Oh good lord no! I had terrible flashbacks to school just looking at the first graph and decided to chance it with my snarky comment anyway.
    LoL... love the openness and wit

    Keep up the hilarious comments deesugar
  11.    #12  
    Quote Originally Posted by grappler View Post
    Disappointment, worry, regret != sense of entitlement
    Saying that the people selling them on eBay shouldn't have gotten them, or that only legacy users/homebrew developers should get them, DOES = entitlement, though.

    EDIT: Why the tow? This is about the TP, not HP and Palm in general.
    Last edited by reggieb; 08/24/2011 at 07:32 PM.
    Blasphemous webOS fan, using Android (with a big phone buying problem)
  12. #13  
    Quote Originally Posted by reggieb View Post
    ...if for example, HP firesaled 300,000 devices to people that had never used webOS, said users fall in love with webOS, and tell an average of 2 people each that it's WAY better than Android, you could have 900,000 new potential webOS buyers.
    That's assuming they're actually using it, not trying to flip it on ebay or load android on it.

    On the other hand, having touchpads in the hands of webOS ******* who can no longer evangelize webOS because, well, lets just say their Sprint Pre-'s aren't exactly the latest and greatest... (Or maybe it's just a bit difficult to convince people that buying a phone on ebay for $200, and performing warranty-voiding surgery on it is the way to go)

    I agree with your overall supply/demand rant (at least I think so, I only skimmed it) but c'mon give the loyal supporters / promoters some tools to work with. (And don't give me that "you should've bought it before" nonsense, not everybody could afford everything they want)
  13.    #14  
    Quote Originally Posted by whyme953 View Post
    That's assuming they're actually using it, not trying to flip it on ebay or load android on it.

    On the other hand, having touchpads in the hands of webOS ******* who can no longer evangelize webOS because, well, lets just say their Sprint Pre-'s aren't exactly the latest and greatest... (Or maybe it's just a bit difficult to convince people that buying a phone on ebay for $200, and performing warranty-voiding surgery on it is the way to go)

    I agree with your overall supply/demand rant (at least I think so, I only skimmed it) but c'mon give the loyal supporters / promoters some tools to work with. (And don't give me that "you should've bought it before" nonsense, not everybody could afford everything they want)
    Even if they are flipping them, they will be flipped in to the hands of someone that WILL use them. And if you want Android on it, you aren't doing that tomorrow. Some users might find while waiting for Android, they really like it. There is no reason that the "loyal supporters" should be first in line.
    Blasphemous webOS fan, using Android (with a big phone buying problem)
  14. #15  
    It's funny....Brand new Pixi Plus's (Verizon) have been available for ~$45-55 for at least 6 months (I have one). Have a "going out of business" sale, and HP blows out their entire stock of handsets in one evening.
    Page Plus Cellular - Talk Smart
    Palm M100 > Treo 600 > Treo 650 > Treo 755P > Palm Pro > Palm Pre-
  15. #16  
    Quote Originally Posted by C-Note View Post
    Whew. I'll wait for the movie.
    Quote Originally Posted by deesugar View Post
    No matter what graph you use, webOS is dead.
    Quote Originally Posted by deesugar View Post
    Read it?
    Oh good lord no! I had terrible flashbacks to school just looking at the first graph and decided to chance it with my snarky comment anyway.
    Thanks, LOL
    Last edited by sinsin07; 08/24/2011 at 08:07 PM.
  16. #17  
    LOL YEA!!!
    http://forums.webosnation.com/members/stargate-albums-my-pre-picture960-moving-pre.gif

Posting Permissions