Everyone has seen it. Take DVD players as an example. A few years back they were several hundred dollars for even an “entry” level unit. Now, you can get one for $50. A Top-Of-The-Line CPU would be pushing $1000 shortly after release, only to be $100 or so after a year or two. DVD Burners for your PC were almost $1000 a couple years ago, but now you can buy one for around $100.
Why is that? I understand that for CPUs, it can hinge on yields which will understandably increase as Intel/AMD/IBM have more experience, but does that account for an approx 90% difference in price? There must be a far larger margin of profit made on the “new” expensive CPU, correct? Make the $$$ on the early adopters?
How about the DVD/CD/Burners and other elctronics then. How do they become so cheap? Do the components in them drop so much just because of mass production? Is there any collusion between “competitors” to set pricing in the early stages of product launches so companies can maximize profits? Or is it genuinely just an example of the law of supply and demand and maturation of production techniques that account for massive price drops in a relatively short period of time?