Hello DBH,

Good article. I remember how expensive my first computer was.

All new technology must recover its development costs and produce demand sufficient for economies of scale to reduce costs before prices can be lowered. You mentioned Solidworks and its cost; one seat of my preferred Cad-Cam program costs four times that amount. It improves our productivity by magnitudes otherwise unheard of. It comes on one disc also. It is worth every penny. Imagine the lack of interest in developing, improving and supporting intellectual property of this nature for only slightly more than the price of recording and distributing a CD! I wonder how much entertainment (movies and music) would be missing in our lives if this mentality prevailed...
Regards,
O.A.

Many inventors don't get their inventions out to market mainly because of the costs involved in the patent process and the promotion expenses. I invented a woodworking jig, patented it, and now am letting the patent expire. After paying a patent lawyer a lot of dollars, paying the initial fees and several renewals to the government over the years, I have decided it's just not worth it. It's mostly my fault, I had no good plan for producing it nor a good plan to market it. Yet everyone that uses a table saw that sees it wants one. At first I had a small machine shop make them, then I did it for myself on a CNC Router at home to cut costs. It was too much work and the only cost I was cutting was my time and labor. I built enough to sell and attempt to recover all the money I had thrown into it. When the current patent period runs out, some company, and I think I know precisely who, will just start building and selling my invention as if it was their own. If the government/lawyer part of the process wasn't so expensive (for the little guy), we'd get a whole lot more useful items to market. Otherwise, my next invention I will just keep to myself and someone may find it in an old 20th Century Motors facility long after I'm gone.

This is what happens when theoreticians write business articles. If you watch TV at all, you can plainly see that a large chunk of the price of smart phones, tablets and even the no cost software is in marketing. So if you thought the industry was unsustainable with the ip costs, throw in the money that Verizon, et al spend on marketing and I guess they're all bankrupt.

There was a perfectly rational comment on this tread that noted that if it weren't viable they wouldn't keep doing it. What drives the ip value is the demand. If the demand drops so will the ip value and the prices. Apparently they're not worried about that issue.

I thought that one of the most basic principles of economics is that price of anything is whatever the market will bear. If you cannot cover all your costs at that price, you go out of business. Alternatives are politically guided economy, i.e. socialist tyranny or the government corruption of crony capitalism. We are getting gradually more and more a composite of the two latter - to our ever increasing detriment.
A smart business will buy very expensive equipment if it will enable them to increase sales volume and decrease their unit price. It happens every day.
Complaining about "too high" prices is purely ideological. Just don't buy it and live without it.

Government of the Stupid, for the stupid, by the Stupid.

Nothing will stop this continuing governance by the inmates of the asylum except Constitutional Amendment Repeal and Repair.
So get on the CARR, we need you to educate the public.

Here are your tools
http://www.TheSocietyProject.org

from the link...
" On this basis, the actual material costs of a cell phone are probably less than $5 and the labor (unskilled labor in the US is worth perhaps $10/hr) involved in making the phone might be worth $5, let’s throw in $10 for distribution and the hard costs of a smartphone are about $20.[i]"

..... and you assume that ALL of the R&D, marketing, advertising, etc., are free currently or completely amortized over all of the previously-delivered products?

Funny...