May QST Article Illustrates Dumbing Down of Ham Radio

[KI4NGN]

Myself and several others have tried to explain the impact of volume on pricing, but Tim then launched into us not understanding freshman ecnonomics.

[AE6IP]

I'll ask the same thing I asked Joe.

If the radios are a good value *today* because of inflation then what were they a *decade* ago. Were the hams of a decade ago overpaying?


Who cares? I'm only in this to show that you haven't made a case that there's collusion in pricing and to try to teach you a bit about how economies of scale and cost recovery work in low volume consumer electronics.

I can't believe the level of rationalization you folks are having to indulge in to justify spending the money the cartel is asking for.

"you folks"? I'm talking about total BOM and you're focusing on one item in the BOM -- and distorting what I said about that item.

See? See what you are having to claim? TFT's are more expensive today than a decade ago. IC's are more expensive than a decade ago.

That's not what I claimed Tim. Depending on the individual IC, the same IC may be, when price adjusted for inflation, the same price, cheaper, or more expensive than it was a decade ago.* But the point I'm bringing up and you keep ignoring is that despite your mistaken claim to the contrary, the vendors aren't using the same ICs they were using a decade ago, and the newer ICs do, indeed, cost ore than the older.

*EVERY* other market in electronics have seen their manufacturing costs go down.

You haven't bought anything with a lot of copper in it lately, have you Tim?

But *YOUR* claim is that HF amateur radio is somehow different and their manufacturing costs have gone *UP*.

Nope. The fact that you keep inventing straw men that don't bear relationship to what people are telling you is showing both that you don't understand and that you're unwilling to understand.

"Feature rich"? That's a Microsoft type claim. Do you *actually* expect anyone to buy into this?

So the 756 has a color rather than monochrome display, a pair of higher precision and higher performance DACs and ADCs, a DSP with more capability, addition filtering, et cetera over the 746. Those are features Tim, and they all cost more money.


When my nephew can go out and buy a $399 computer with a 64 bit processor, 7.1 surround sound, Nvidia graphics card, 160Gb hard disk, 2Gb memory, AND a 17" LCD screen and you tell me that parts are more expensive today than a a decade ago I think I can see a rationalization coming down the track.

Yes, And it's yours. Congratulations for pointing out the market in which economies of scale have the largest impact on cost anywhere in electronics.


I didn't say there shouldn't be a price difference. I said how can their be such a *large* difference?

And then you said the DSPs are the same, which is wrong, and I tried to point out that there are a lot of components that are different, and you focused on just one of them, and misunderstood the comparison you needed to make to see the difference.

The cost of the DSP's and the displays can hardly be $1200 or so, Marty -- no matter how much you would like to rationalize that it is so.

Actually, for a retail price difference of $1200 in consumer electronics, the BOM difference is more likely to be around $300, if the devices were designed and implemented at about the same so that NRE costs are comparable, and sold in about the same quantities, so that economies of scale are similar. BOMS is rarely more than 25% of cost in CE and often as little as 10%.


Yeah, somehow *I* don't understand the economics. This when *you* have now added your rationalization that HF amateur radio somehow uses *different* TFT technology than the rest of the world and that the HF amateur radio TFT costs have gone *UP* while the rest of the worlds has gone down?

Another straw man. My point was that amateur radio manufactures buy TFTs in smaller quantities than your examples, and thus don't get the economies of scale. You made up out of whole cloth that they were "different".

Yeah, I'm sure it is *me* that doesn't understand the economics.

Or, for that matter, as your post makes pretty clear, what you're being told either.

In your response, you haven't accurately characterized a single one of my points.

You really don't understand this stuff, Tim, and every time you respond to people you're just making it clearer how poorly you do understand it.


* The vendor's cost for an IC is relatively high near the start of a run of that IC because manufacturing yield is low and because there are fab startup costs that have to be recouped from the first run. It decreases as yield increases and other startup costs are recouped from following runs. It increase again near the end-of-life of the IC as decreasing demand leads the vendor to reduce the size of runs, losing economy of scale. This is, of course, all assuming that all other costs remain constant. Increasing costs of raw materials, power, or labor, may be sufficient to negate, or at least reduce, the effect of this curve.

[K7JEM]

LOL!

Why am I not surprised to see you value form more than function? You have exactly no idea which is better at their trade but would chose solely on outward appearance.

Is it any wonder you think you are getting a good buy from the cartel?

tim ab0wr

But outward appearance is an important aspect of that kind of purchase!

And it may have some indication of the rest of the functionality.

http://www.motorauthority.com/wp-content/uploads/Lexus/IS/spy/2008_lexus_IS_F_front_corner.jpg
http://www.taberconsulting.com/shared/images/newsletter/junker.jpg


The bottom car might run and ride better than the top car, but probably not.

Joe

[ab0wr]

Because they all pay the same price for a barrel of oil, the price of which is set by the oil cartels.

First off they *DON"T* pay the same price, not all at the same time.

No gas company sets it price according to the cost of the oil that went into making the gas being pumped. That would be a nightmare to track.

They would it in a competitive market since it would be *that very thing* that would let them be a better competitor.

They set their prices acccording to what they are currently paying for the oil. When the price of oil changes, it changes for everyone.

Yep, a non-competitive market.

What do you think I've been saying? The suppliers control the market, not supply and demand.

So if there is no cartel, if they are not colluding to set prices, what does that leave other than a small number of manufacturers competing in a very small market?

Because, as you explained yourself above, there *is* no competition.

As usual, you folks start hollering there is competition, then you describe a non-competitive market, and then claim it is a competitive market.

And I'm the one not making any sense?

Is it so difficult for you to accept that all of the vendors, using the same range of technologies, probably have costs that are all in the same ballpark? If this can be accepted, why is it so difficult to accept that they all have some minimum margin required to say in business, and this results in prices that are within the same ballpark?

When you are paying 1999 prices for electronics equipment that has seen at least a four-fold increase in productivity over the past decade then, YES, it is impossible for me to rationalize to myself that I am getting a good value for what I am paying.

This hasn't got anything to do with minimum margin. They could get the very same margin by building something that costs a 1/4 to build and selling it for 1/2 the price of what they are selling today.

Why does no one have an answer for my question:

If prices are good today because of inflation then what were they a decade ago when the price was exactly the same?

Are the current purchasers paying too much today or were the purchasers back then paying too much?

This isn't collusion for setting prices, and it doesn't mean that they're not competing. They try to compete based on features, trying to keep prices within range of what the market sets while still remaining profitable.

Mike, don't let anyone fool you. There *is* no competition.

Do you *really* think that Icom is depending on the TFT market a decade later for buying the exact TFT that the 756 needs for that 756 that comes off the production line tomorrow that has your name on it? Anyone in electronics that thinks they can go out a decade later and get the *exact* same part is going to be sadly mistaken. Go try and find the *exact* tuner that your analog Sears TV needs that is a decade old so you can fix the TV. What you are paying for is the poor decision by Icom on what their sales were going to be. What you are buying is faceplates at 1999 prices that are still sitting in the warehouse. What you are buying are IC's at 1999 prices that are still sitting in the warehouse. What you are buying is the output of high-priced manufacturing equipment from a decade ago that doesn't take adavantage of the productivity gains over the past decade.

It's a non-competitive market. The suppliers control it. They know that hams like you will pay 1999 prices for something that should cost a quarter of what it cost in 1999. And *you* rationalize it by using inflation while forgetting productivity, by using "volume" that is a resultant of the market and not a cause of the market, by saying that "the market is competitive enough", by saying that the pieces and parts used in ham radios are more expensive than in other electronic equipment, and by using all the other garbage that has been thrown up here -- none of it which makes any economic sense at all.

It's all rationalizations.

If you *LIKE* paying the price Icom wants for the 756proIII -- go right ahead and pay it. Icom will chuckle all the way to the bank. But stop fooling yourself that you are getting a good bargain because of "inflation". You aren't. That's just a rationalization you are using to make yourself feel better about paying such outrageous prices.

tim ab0wr

[K7JEM]

And I'm the one not making any sense?

tim ab0wr

You need to change the question mark to a period.

[ab0wr]

Who cares? I'm only in this to show that you haven't made a case that there's collusion in pricing and to try to teach you a bit about how economies of scale and cost recovery work in low volume consumer electronics.

You aren't *teaching* anything. You still haven't made a case for any claim.

That's not what I claimed Tim. Depending on the individual IC, the same IC may be, when price adjusted for inflation, the same price, cheaper, or more expensive than it was a decade ago.* But the point I'm bringing up and you keep ignoring is that despite your mistaken claim to the contrary, the vendors aren't using the same ICs they were using a decade ago, and the newer ICs do, indeed, cost ore than the older.

Yeak, of course that is why memory just keeps on going down in price while the amount of memory goes up -- the IC's cost more so so the vendors charge less! ROFL!!

The DSP's in consumer home theater receivers cost more today than a decade ago so the vendors charge less for them so the receivers can be sold cheaper. ROFL!!!

The TFT's used in other consumer equipment cost ten times what they did a decade ago so the vendors charge 1/10 the price for them so the consumer can buy dual displays for $125. ROFL!!

You haven't bought anything with a lot of copper in it lately, have you Tim?

That's one reason why consumer electronics gets cheaper over time, the productivity costs require *less* copper to be used to get more features! So the price increases of copper don't just don't have the impact they did a decade ago.

Nope. The fact that you keep inventing straw men that don't bear relationship to what people are telling you is showing both that you don't understand and that you're unwilling to understand.

Sorry, Marty, all I see from you is *more* rationalizations -- including that IC's cost more today than a decade ago.

So the 756 has a color rather than monochrome display, a pair of higher precision and higher performance DACs and ADCs, a DSP with more capability, addition filtering, et cetera over the 746. Those are features Tim, and they all cost more money.

*HOW* much more money, Marty? $1200? No way. Not using today's prices.

Yes, And it's yours. Congratulations for pointing out the market in which economies of scale have the largest impact on cost anywhere in electronics.

Yes, and thanks for pointing out that the amateur radio manufacturers are *NOT* taking advantage of those very same economies of scale.

There isn't any reason why Icom can't use the exact same TFT used in a consumer DVD player for an auto! Other than the fact that they bought way too many of them a decade ago and are still charging 1990's prices for them *today*.

And then you said the DSPs are the same, which is wrong, and I tried to point out that there are a lot of components that are different, and you focused on just one of them, and misunderstood the comparison you needed to make to see the difference.

There are a lot of *features* that are different. That's software in the DSP's. As Icom advertises, they both use 24bit ADC with 32bit DSP's. My nephews computer has 24bit ADC in the sound card and a 64bit processor -- for less cost than an Icom 718.

I didn't misunderstand anything. I just paid *less* --in absolute dollars-- for an Onkyo home theater receiver with 7.1 sound last weekend than I did for a Pioneer four years ago with 5.1 sound. Better, faster DSP's with lot's more modes -- for *LESS MONEY IN ABSOLUTE DOLLARS*.

ROFL!! But not in the ham radio market.

Actually, for a retail price difference of $1200 in consumer electronics, the BOM difference is more likely to be around $300, if the devices were designed and implemented at about the same so that NRE costs are comparable, and sold in about the same quantities, so that economies of scale are similar. BOMS is rarely more than 25% of cost in CE and often as little as 10%.

Engineering and design costs are the *exact* thing I was talking about earlier. I have never been associated with a company that would accept a six year interval before their rate-of-return would go positive because of NRE on something electronic. In today's world, obsolescence is measured in those intervals, not return on investment.

It is only in non-competitive markets where the suppliers control the market that such could happen.

Another straw man. My point was that amateur radio manufactures buy TFTs in smaller quantities than your examples, and thus don't get the economies of scale. You made up out of whole cloth that they were "different".

Marty!!! LISTEN PLEASE

It's like I said, Icom could go out on the retail market, buy up all the dual display auto DVD players WalMart has, and have TFT displays for $60 apiece including an attached connector.

****** ON THE RETAIL MARKET *****

And here you are talking about economies of scale?

And I'm the one making up strawmen?


Or, for that matter, as your post makes pretty clear, what you're being told either.

Man, talk about the pot calling the kettle black!

In your response, you haven't accurately characterized a single one of my points.

Sure I have -- like the one just above. Here you are talking about economies of scale for Icom like they can't make any use of the current market realities. They could buy parts retail from WalMart cheaper than they are apparently getting them today. ---There is a reason for that----. It's a non-competitive market and you are paying for Icoms (and the other manufacturers) inefficiencies.

You really don't understand this stuff, Tim, and every time you respond to people you're just making it clearer how poorly you do understand it.

Yeah, I don't understand why TFT's bought by Icom cost so much in today's market and your claim of "economies of scale" is an answer? When they could buy them cheaper from Walmart on a retail basis?

ROFL!! Tell me another tale, Marty.


* The vendor's cost for an IC is relatively high near the start of a run of that IC because manufacturing yield is low and because there are fab startup costs that have to be recouped from the first run. It decreases as yield increases and other startup costs are recouped from following runs. It increase again near the end-of-life of the IC as decreasing demand leads the vendor to reduce the size of runs, losing economy of scale. This is, of course, all assuming that all other costs remain constant. Increasing costs of raw materials, power, or labor, may be sufficient to negate, or at least reduce, the effect of this curve.

SO WHAT?

This somehow explains why you guys are willing to pay 1990's prices for ham radios today?

This explains why HF radios today are the same price as they were in the 1990's?

Answer my question, Marty: If prices today are so good because of inflation then what were they a decade ago -- way too high? Who's the screwee here? Hams of 1999 or hams of today?

tim ab0wr

[n3mqm]

But outward appearance is an important aspect of that kind of purchase!

And it may have some indication of the rest of the functionality.

http://www.motorauthority.com/wp-content/uploads/Lexus/IS/spy/2008_lexus_IS_F_front_corner.jpg
http://www.taberconsulting.com/shared/images/newsletter/junker.jpg


The bottom car might run and ride better than the top car, but probably not.

Joe

No dog in this fight, but the 57 two door wagon a.k.a a Chevy Nomad is worth a few grand in that condition.

[K7JEM]

No dog in this fight, but the 57 two door wagon a.k.a a Chevy Nomad is worth a few grand in that condition.

And the other car isn't? :D

[n3mqm]

And the other car isn't? :D
We'll see in 50 years;)

[K7JEM]

This somehow explains why you guys are willing to pay 1990's prices for ham radios today?

This explains why HF radios today are the same price as they were in the 1990's?

Answer my question, Marty: If prices today are so good because of inflation then what were they a decade ago -- way too high? Who's the screwee here? Hams of 1999 or hams of today?

tim ab0wr

In 1990, the TS-140 sold for $1100. In 2008, the IC718 sells for $750, and has the edge in features and performance.

In 1990, the TS-940 sold for $2000. In 2008, the TS2000 sells for $1600, and has more features and additional bands.

In 1990, the IC-751 sold for 1500. For the same money today, you get an IC746 pro, which is far superior, has more bands, and more features.

The list goes on. I don't know of any HF radio that has gone up in price, there may be one, but it's an rarity.

All of the new radios have tons more features and improvements, too. Additional bands, modes, and DSP to mention a few.

Joe

[AE6IP]

The TFT's used in other consumer equipment cost ten times what they did a decade ago so the vendors charge 1/10 the price for them so the consumer can buy dual displays for $125. ROFL!!

The TFTs used in the 756 and other consumer equipment didn't exist 10 years ago.


*HOW* much more money, Marty? $1200? No way. Not using today's prices.

How can you possibly know this? You can't even tell which parts are in which box. You're guessing, Tim, and you're doing it with no experience at producing consumer electronics devices.


Yes, and thanks for pointing out that the amateur radio manufacturers are *NOT* taking advantage of those very same economies of scale.

How can they? You don't buy a million TFTs if you're not going to build a million devices, Tim.

Remember my two phones? The low volume one's BOM is ten times that of the high volume one simply because of volume economies.


There are a lot of *features* that are different. That's software in the DSP's. As Icom advertises, they both use 24bit ADC with 32bit DSP's. My nephews computer has 24bit ADC in the sound card and a 64bit processor -- for less cost than an Icom 718.

Once again you're failing to understand economy of scale. A DSP isn't a part you drop into a device. It's a part you have to program and debug. It costs about the same to debug the DSP in the Icom as it did in your nephew's computer, but the computer vendor gets to split that cost over orders of magnitude more boards than Icom does. To make up for that, they have to build a higher cost per board into the device.

I didn't misunderstand anything. I just paid *less* --in absolute dollars-- for an Onkyo home theater receiver with 7.1 sound last weekend than I did for a Pioneer four years ago with 5.1 sound. Better, faster DSP's with lot's more modes -- for *LESS MONEY IN ABSOLUTE DOLLARS*.

That comparison is more proof that you don't understand. Onkyo will sell ten or one hundred times more units of that receiver than Icom will of the 756. That means they get to charge less than 1/10th the NRE per unit to recover their costs.


Engineering and design costs are the *exact* thing I was talking about earlier. I have never been associated with a company that would accept a six year interval before their rate-of-return would go positive because of NRE on something electronic. In today's world, obsolescence is measured in those intervals, not return on investment.

So you've never been associated with a consumer electronics company. We already know that.

It is only in non-competitive markets where the suppliers control the market that such could happen.

And yet, I have participated in it happening in the most competitive consumer market on the planet: smartphones.

Marty!!! LISTEN PLEASE

No Tim, it is you who needs to listen. You're still going on about the TFT, which I mentioned as one piece of the price difference, as if it were the only thing in the device. The TFT adds to the BOM, not dominates it. I've already said several times that it is only part of the cost, and you keep going on about it and ignoring any of the rest of the cost difference.

Tim, you don't know the simplest information that you would need to know to estimate the BOM of an Icom transciever. You don't even get right what parts are in them. You keep ranting about how one part alone can't make the difference when you have no idea at all what the BOM on either device is.

Answer my question, Marty: If prices today are so good because of inflation then what were they a decade ago -- way too high? Who's the screwee here? Hams of 1999 or hams of today?

Neither. Both paid no hidden costs and bought what they were willing to pay for.

Now you answer my questions, all of which are needed before you can estimate if the Icom 756 pro III costs less per unit than the Icom 746:

1) What was the NRE for each?
2) How many units were made of each to this point?
3) What is the BOM for each?

Answer the questions, Tim. Otherwise, all you're doing is guessing in support of your rationalization. And you're guessing about a field you have absolutely no experience in.

[AE6IP]

In 1990, the TS-140 sold for $1100. In 2008, the IC718 sells for $750, and has the edge in features and performance.

In 1990, the TS-940 sold for $2000. In 2008, the TS2000 sells for $1600, and has more features and additional bands.

In 1990, the IC-751 sold for 1500. For the same money today, you get an IC746 pro, which is far superior, has more bands, and more features.

The list goes on. I don't know of any HF radio that has gone up in price, there may be one, but it's an rarity.

All of the new radios have tons more features and improvements, too. Additional bands, modes, and DSP to mention a few.

Joe

There you go, confusing Tim with facts again.

[KI4NGN]

Guys, guys.

Tim entered into the discussion to tell us all why he would never purchase a new rig.

This has him in a position where he can only argue how everyone is rationalizing paying higher prices, because to admit that we are in fact not doing that would be to admit that his rationalization is incorrect. He's never going to do that.

Mike

[ab0wr]

Neither. Both paid no hidden costs and bought what they were willing to pay for.

Exactly the answer I figured I would get. Another rationalization.

Remember my two phones? The low volume one's BOM is ten times that of the high volume one simply because of volume economies.

And the volumes of sales between a 746 and a 756 are different enough to be the answer for the price differential?

It's obvious you are still fishing for a believable rationale. This one isn't believable either. What will you throw out next?

You still haven't answered why Icom can't just go out on the *RETAIL* market and get TFT's cheap enough to make the price differential between the 746 and 756 almost nothing from a BOM point of view.

So you've never been associated with a consumer electronics company. We already know that.

Yeah, right. If you have the cash on hand to fund a project and the return on investment doesn't go positive for a decade you would be better off just buying T-bills with it. If you have to borrow the cash to fund a project and the return on investment doesn't go positive for a decade you won't get very many future loans because of the risk of doing business with you.

This is true for *ANY* company. Depreciation schedules are typically far, far shorter than this. If you can't make a positive rate of return by the time you've depreciated out your manufacturing investment then why get into the market at all?

You make blanket statements about me not knowing anything about economics and yet you *KEEP* right on talking nonsense.

Keep it up.

tim ab0wr

[ab0wr]

In 1990, the TS-140 sold for $1100. In 2008, the IC718 sells for $750, and has the edge in features and performance.

In 1990, the TS-940 sold for $2000. In 2008, the TS2000 sells for $1600, and has more features and additional bands.

In 1990, the IC-751 sold for 1500. For the same money today, you get an IC746 pro, which is far superior, has more bands, and more features.

The list goes on. I don't know of any HF radio that has gone up in price, there may be one, but it's an rarity.

All of the new radios have tons more features and improvements, too. Additional bands, modes, and DSP to mention a few.

Joe

And in 1999 you paid what for that 746?

And in 2008 you paid what for that 746?

ROFL!!!

Heck, even the *auto* manufacturers change their cars more often than this in order to take advantage of productivity gains.

And you are still trying to convince yourselves that the HF radio market is a competitive one and that you are getting a "good value" for the money you are spending?

ROFL!!!

In truth you guys are getting left behind in the market. But that's ok! You just keep paying Yacomwood whatever they want. If you were to get into the alternative market you would just raise the demand thus raising prices and making *me* pay more!

Yacomwood can laugh at your expense all the way to the bank.

And that's the bottom line that you guys are all trying to rationalize away so you can feel better.

Have at it!
tim ab0wr

[WA0LYK]

I've tried to stay out of this because no one really knows what the manufacturer's costs are or what their marketing strategy is.

However, there are a couple of things to think about. If rigs such as the 756, whose price has barely changed over the years, is a good buy now due to inflation, then it must not have been a good buy when it was originally introduced. You just can't have it both ways.

Secondly, with the drop in the dollar one would expect the price of the rig to increase dramatically if it was priced close to cost to begin with. Otherwise one would have to assume that icom is simply being a good joe and selling them at a loss. Not likely.

When a product such as this with a years long product cycle can ignore both inflation and exchange rate devaluation SOMETHING in its pricing is suspect. My guess is that their marginal profit is pretty high. In a truly competitive market, one would not expect such high marginal profit levels to be achieved.

Whether its a good buy or not is up to each individual purchaser to decide. If you have the money and feel it's a good price, then great. But, don't try to convince someone without the money or the need that YOU got a good deal and therefore everyone should buy one because it is a good deal.

Amateur radios and gas stations are very similar. There are a limited number of suppliers and this allows them to maximize their price. Are they cartels? Probably not since they don't most likely collude. However, it takes little work to monitor the prices of others and thereby increase your prices regardless of cost. The incentive here is to maximize price, not minimize it.

This in essence, makes your purchase a good price RELATIVE to the cost of the other products. However, it is doubtful that it is a good price in ABSOLUTE terms, i.e. some set percentage above actual cost.

Jim
WA0LYK

[KI4NGN]

And in 1999 you paid what for that 746?

And in 2008 you paid what for that 746?

ROFL!!!

Heck, even the *auto* manufacturers change their cars more often than this in order to take advantage of productivity gains.

And you are still trying to convince yourselves that the HF radio market is a competitive one and that you are getting a "good value" for the money you are spending?

ROFL!!!

In truth you guys are getting left behind in the market. But that's ok! You just keep paying Yacomwood whatever they want. If you were to get into the alternative market you would just raise the demand thus raising prices and making *me* pay more!

Yacomwood can laugh at your expense all the way to the bank.

And that's the bottom line that you guys are all trying to rationalize away so you can feel better.

Have at it!
tim ab0wr
You really believe that auto manufacturer's often change vehicles because of productivity gains? You really believe that?

Oh wait, I forgot, you never purchase a new car.

And you never purchase a new rig.

And anyone who purchases "new" is a fool.

A theory that doesn't explain reality is a faulty theory.

You've already admitted that there is no HR cartel, though you have subsequently brought the word back into play.

If there is no cartel, then what does that leave?

A non-competitive business in which there is no price setting collusion? It's just a coincidence that rig manufacturer's all price their gear within certain price ranges for certain levels of gear?

You still haven't answered that question.

[AC0H]

I've tried to stay out of this because no one really knows what the manufacturer's costs are or what their marketing strategy is.

However, there are a couple of things to think about. If rigs such as the 756, whose price has barely changed over the years, is a good buy now due to inflation, then it must not have been a good buy when it was originally introduced. You just can't have it both ways.

Secondly, with the drop in the dollar one would expect the price of the rig to increase dramatically if it was priced close to cost to begin with. Otherwise one would have to assume that icom is simply being a good joe and selling them at a loss. Not likely.

When a product such as this with a years long product cycle can ignore both inflation and exchange rate devaluation SOMETHING in its pricing is suspect. My guess is that their marginal profit is pretty high. In a truly competitive market, one would not expect such high marginal profit levels to be achieved.

Whether its a good buy or not is up to each individual purchaser to decide. If you have the money and feel it's a good price, then great. But, don't try to convince someone without the money or the need that YOU got a good deal and therefore everyone should buy one because it is a good deal.

Amateur radios and gas stations are very similar. There are a limited number of suppliers and this allows them to maximize their price. Are they cartels? Probably not since they don't most likely collude. However, it takes little work to monitor the prices of others and thereby increase your prices regardless of cost. The incentive here is to maximize price, not minimize it.

This in essence, makes your purchase a good price RELATIVE to the cost of the other products. However, it is doubtful that it is a good price in ABSOLUTE terms, i.e. some set percentage above actual cost.

Jim
WA0LYK

Of course the profit margin is high.
Amatuer radio's are not high volume products and Hams world wide are known for keeping gear long periods of time. I'd be surprised if the profit margin on a 756 wasn't pushing 60-70%. No, that isn't retailer profit margin, thats Icom profit margin.

If their PM isn't that high then Icom needs new management. No way they could reasonably justify building relatively low numbers of 756's without making lots of money on each one. They way to do that is through economies of scale, outsourcing of board construction, and productivity enhancements (use of robotics).

What it costs Icom to build a 756 ProIII today is probably much less than it was when it was introduced.

[WA0LYK]

Of course the profit margin is high.
Amatuer radio's are not high volume products and Hams world wide are known for keeping gear long periods of time. I'd be surprised if the profit margin on a 756 wasn't pushing 60-70%. No, that isn't retailer profit margin, thats Icom profit margin.

If their PM isn't that high then Icom needs new management. No way they could reasonably justify building relatively low numbers of 756's without making lots of money on each one. They way to do that is through economies of scale, outsourcing of board construction, and productivity enhancements (use of robotics).

What it costs Icom to build a 756 ProIII today is probably much less than it was when it was introduced.

If it costs Icom much less today to build a proIII than it did when it was introduced, then is it really a good deal considering the price has changed hardly at all?

You'll notice I didn't try to deal with icom's business decisions on purpose because it really doesn't matter. When the price stays constant over time considering inflation and exchange rates then either someone didn't or isn't getting a good deal in ABSOLUTE terms.

Jim
WA0LYK

[KI4NGN]

I've tried to stay out of this because no one really knows what the manufacturer's costs are or what their marketing strategy is.

However, there are a couple of things to think about. If rigs such as the 756, whose price has barely changed over the years, is a good buy now due to inflation, then it must not have been a good buy when it was originally introduced. You just can't have it both ways.

Secondly, with the drop in the dollar one would expect the price of the rig to increase dramatically if it was priced close to cost to begin with. Otherwise one would have to assume that icom is simply being a good joe and selling them at a loss. Not likely.

When a product such as this with a years long product cycle can ignore both inflation and exchange rate devaluation SOMETHING in its pricing is suspect. My guess is that their marginal profit is pretty high. In a truly competitive market, one would not expect such high marginal profit levels to be achieved.

Whether its a good buy or not is up to each individual purchaser to decide. If you have the money and feel it's a good price, then great. But, don't try to convince someone without the money or the need that YOU got a good deal and therefore everyone should buy one because it is a good deal.

Amateur radios and gas stations are very similar. There are a limited number of suppliers and this allows them to maximize their price. Are they cartels? Probably not since they don't most likely collude. However, it takes little work to monitor the prices of others and thereby increase your prices regardless of cost. The incentive here is to maximize price, not minimize it.

This in essence, makes your purchase a good price RELATIVE to the cost of the other products. However, it is doubtful that it is a good price in ABSOLUTE terms, i.e. some set percentage above actual cost.

Jim
WA0LYK
Yep, the retail price of the 756ProIII has more or less remained steady, but the rig hasn't been around for enough years for inflation to be a significant part of it's pricing.

Then consider, who's paying retail for this rig these days? Every retailer I've seen offer's some form of discounts and/or rebates, and the retailer is sure not absorbing that. That's a price reduction.

Yep, the incentive is to maximize price, in other words set the price according to what the market will bear.

Try telling that to Tim!

Again, all anyone has said regarding inflation is that we're getting more rig for our dollar than we used to. Does that equate to prices being set a low as they possibly could with the manufacturer remaining in business? Of course not. It's just a simple, factual statement.

Perhaps they have huge margins. I would actually expect this given that they sell units by the thousands (if they're lucky), where as other consumer electronics sell in the hundred of thousands to millions of units.

Who buys anything in the consumer electronics market with the knowledge of the manufacturing costs and other overhead, using that information to determine if they're getting a good deal?

Tim bases his knowledge of manufacturing costs on what he sees for the pricing of mass volume consumer electronics, refusing to reconcile prices with the size of the markets and manufacturing volume.

Mike

[WA0LYK]

Yep, the retail price of the 756ProIII has more or less remained steady, but the rig hasn't been around for enough years for inflation to be a significant part of it's pricing.

Then consider, who's paying retail for this rig these days? Every retailer I've seen offer's some form of discounts and/or rebates, and the retailer is sure not absorbing that. That's a price reduction.

Yep, the incentive is to maximize price, in other words set the price according to what the market will bear.

Try telling that to Tim!

Again, all anyone has said regarding inflation is that we're getting more rig for our dollar than we used to. Does that equate to prices being set a low as they possibly could with the manufacturer remaining in business? Of course not. It's just a simple, factual statement.

Perhaps they have huge margins. I would actually expect this given that they sell units by the thousands (if they're lucky), where as other consumer electronics sell in the hundred of thousands to millions of units.

Who buys anything in the consumer electronics market with the knowledge of the manufacturing costs and other overhead, using that information to determine if they're getting a good deal?

Tim bases his knowledge of manufacturing costs on what he sees for the pricing of mass volume consumer electronics, refusing to reconcile prices with the size of the markets and manufacturing volume.

Mike

What I'm trying to point out is that the size of the markets and manufacturing volume have nothing to do with the prices. It is as you say, what the market will bear. This very fact means that for a lot of people, you are NOT getting more rig for the same money. In essence, you are getting more rig for more money than it should cost.

Name one other consumer electronics product where you don't get more performance/features for LESS money than you paid five years ago. I can't think of one, not pc's, tv's, dvd's, radios, etc. Basically, not only does the performance go up, but the price decreases in real terms.

Whether this is because of collusion as in a cartel, or because astute manufacturers have good marketing departments that understand relative pricing is beside the point. In the end, the pricing ACTS like it done by a cartel. Just like gas stations, if the guy down the street raises the price two cents/gallon, you do the same regardless of your costs.

Basically, whether you feel you got a good deal or not is a personal decision. If the additional features and performance is worth the cost to you at that point in time, then great. However, if one feels the additional features and performance is not worth the cost at any point in time, then that is great also.

Trying to convince everyone that you are getting a good deal because a 756 is better than a kwm-2 yet they both cost $3000 when new is trying to get everyone to validate your personal decision. Don't expect everyone to agree. There are many things other than initial price that go into the overall cost of ownership. For one thing, many of those kwm-2 owners will laugh when you tell them your 756 will still be operating in 40 years. How many original 746's have been junked already because displays are no longer available? I guess what I'm saying is be careful when you say you're getting more radio for the money.

Jim
WA0LYK

[N9MOQ]

Name one other consumer electronics product where you don't get more performance/features for LESS money than you paid five years ago. I can't think of one, not pc's, tv's, dvd's, radios, etc. Basically, not only does the performance go up, but the price decreases in real terms.

In all consumer electronics, I notice that the QUALITY of the products always go down, while prices to obtain the same quality would be much higher as every year goes by.

For instance, a Denon stereo could be bought in 1984 for about $200 that had a class A amplifier. How much would it cost to get a Denon (or any other brand) stereo with a class A amplifier today? Probably well over $1500, if they make one.

A good Sony CRT television with excelent picture quality for $500 in the 80s and 90s, but today all you can get are fuzzy blurry pixelated LCD or Plasma screens for a price tag of thousands of dollars that look just horrible.

Analog cellphones not only sounded good in the 80s and 90s, they were usually FREE with paid service. Today you can't understand what anyone is saying on digital cellphones (that have completely ruined talk radio) and now you are expected to shell out money to pay hundreds of dollars for these horrible sounding phones. (Sound quality down, prices up.)

Sure the phones can take pictures and play movies, but it is supposed to be a PHONE and it is more important that I can UNDERSTAND what the person is saying over it, like we could back with analog technology.

Take a look at the quality of the case, knobs, switches and look and feel of a Kenwood TS-440 and compare it to any of the plastic looking models they offer today. Especially in the same price range.

QUALITY is more imporatant to me than extra "features" on a lesser quality machine in comparison.

You could buy a bike with fitted tubes in the 80s for $200, but today if you ask for such a bike, they say it would cost in the thousands, they just weld the pipes together now for bikes that cost way over $200.

A Panasonic "Boom Box" in the 80's sounded better than most people's home stereos do today. All the boom boxes today sound like crap and are way too expensive for the poor quality in sound they provide.

For just a good sounding quality basic, no frills, no fancy feature, analog tuning AM/FM radio (no CD, tape, or anything else) and a single good sounding 3 or 4 inch front speaker, it costs $100 today. (Tivoli Audio Model One)

Sure you can buy an AM/FM/CD/MP3 STEREO radio with alarm clocks and stop watches for $15, but they sound like crap and don't last very long before breaking down.

Answering machines sounded so good, I could make messages with music mixed on them, and it all came through clear to anyone calling to hear the message. All answering machines today sound horrible and you can hardly understand the intended human voice it is made to record.

It seems that technology and quality PEAKED in the 1980s, and since then has been falling like a rock.

[WB2WIK]

In all consumer electronics, I notice that the QUALITY of the products always go down, while prices to obtain the same quality would be much higher as every year goes by....<snip>


::Definitely some truth there. As I posted twice before in this thread, technology tends to cost less as it becomes more abundant, but nothing else does. A 1977 Kenwood TS-520S is heavy, contains lots of metal, and most of them are still on the air and working fine 31 years later. Today's "equivalent" utility HF transceivers have more features (almost all of which are the result of ASICs and software) but they're not built as well and I wonder how many of them will be around and working fine in 2039? My guess: Not many.

Ditto all consumer electronic products. iPods are really cool but how many have lasted more than 24 months? As far as I know, none of them have. I've gone through "three" already. The battery only lasts about a year if you use it a lot, and is not considered a field replaceable device (although it's possible to do, Apple doesn't condone it and this will void the factory warranty).

The comment about the digital phones is correct also. Yes, thanks to technology, the batteries now last much longer and the phones are also cameras and video players, and have a thousand memories. But they pretty much all sound like crap, so that point was valid.

My daughter's had three LG "Chocolate" cell phones in a row, all within 18 months because none of them lasted more than six. The charger port connector is weak and if you plug in the charger cable enough times, the connector in the phone (non-serviceable) breaks, and that's that.

I agree that while high-tech whiz-bang stuff is all really cheap now, it's also really cheaply made.

Thousands of Collins S-lines from the late 50s and 60s are still in service, 50 years later.

Let's see how many "anythings" electronic built today will still be running in 2058.

WB2WIK/6

[ab0wr]

And now we are back to the rationalizations of volume being a cause of the intersection of supply and demand instead of a result of the intersection of supply and demand.

In a competitive market volume is a *result*, not a cause.

And I just love the rationalization that profit margin has to be higher in a low volume unit than in a high volume unit.

Why?

If you make 17% net profit aren't you making 17% net profit?

What you all have been and are still are postulating is that the manufacturers like Icom have a *fixed* total amount of net profit they expect to make on the product line. If they don't think they are going to sell many then the markup per unit has to be very high to reach that *fixed* amount they expect. And then, somehow, that price stays the same over the entire life of the product whether they actually reach that expected "fixed" profit level whether they exceed it.

I've NEVER been involved with a product where the total net profit for an entire product line is determined *first* and then that is the starting point for determining the price of the product for the total life of the product! Yet *that* is what you would have everyone believe is done for HF amateur radios by saying that "low volume" determines pricing that remains the same over an entire decade.

Again, THAT IS AN INDICATOR OF A NON-COMPETITIVE MARKET where the suppliers exert significant control over the market. In other words the demand side of the equation is no factor. In a market like that whether you get a good deal or not is up totally up to the supplier.

Remember, as LYK pointed out, using this kind of logic (low volumes set high prices) would dictate that Icom *raise* its prices as the dollar sinks against the yen in order to maintain that "low volume high margin pricing" required to make the product line profitable.

Yet that is NOT happening. That alone should be an indication of something wrong with the logic.

As LYK also pointed out, in this kind of market the incentive is to *MAXIMIZE* price because that is what maximizes profit. "Charging what the market will bear" is NOT the best strategy in a competitive market because it doesn't maximize total net profits, only net profit per unit. If you follow this strategy in a competitive market you will lose market share, and therefore sales quantity and therefore total net profit, to someone that can maximize their efficiencies in order to price at a lower level.

Contrary to what Mike believes, if the suppliers of HF ham radios are "charging what the market will bear" then that is actually proof of a non-competitive market where the consumers *are* getting screwed because they are paying for the inefficiencies of the suppliers in the market.

Everything that has been offered up yet on here is either an economic impossibility or a a pure rationalization trying to justify the prices being paid as a "good value". From offering up excuses that ham radio projects have positive Net Present Value intervals that take longer to reach than the depreciation of the manufacturing equipment used to make the product to excuses that IC's cost more to make today than a decade ago to the excuse that manufacturers "charge what the market will bear" in a competitive market, all you guys are doing --- AND I MEAN ALL YOU ARE DOING is trying to make yourselves feel better for paying such high prices.

And now we see a change from "its a good value when considering inflation" to "inflation hasn't been around enough years to be a factor" as the rationalization de jour.

ROLF!!

NGN:Who buys anything in the consumer electronics market with the knowledge of the manufacturing costs and other overhead, using that information to determine if they're getting a good deal?

When I was in Nebraska Furniture Mart there were *HUGE* numbers of people doing just that! No, they weren't asking what the positive NPV interval was for the product line, they were comparing prices and features. The manufacturers offering the lowest prices with the best features were getting the attention. The salesman said they were selling the Onkyo packages like hot cakes because you just couldn't beat the price/feature combination. *THESE UNITS WERE NOT ON SALE EITHER*. They were being sold at their suggested retail price -- AND WERE STILL BEATING THE COMPETITION.

How is Onkyo doing that? By lowering manufacturing costs and other overhead!!! And when their prices are less, IN ABSOLUTE TERMS, than prices of five years ago [b]it *is* a good deal[b]. And the consumers know that -- even if it is indirectly instead of directly.

I just can't get over the need for hams to justify that they aren't getting screwed using all kinds of rationalizations that make no economic sense. If you enjoy it then enjoy it. Yacomwood is certainly enjoying it -- there's no doubt of that.

tim ab0wr

[KI4NGN]

Name one other consumer electronics product where you don't get more performance/features for LESS money than you paid five years ago. I can't think of one, not pc's, tv's, dvd's, radios, etc. Basically, not only does the performance go up, but the price decreases in real terms.Jim
WA0LYK
I think that increasing volume over the years, which allows for lower margins, factors into this much more than you are crediting.

Flat panel TV's are a prime example. I'm sure they have recouped a lot of their cost, which allowed them to lower prices, in the fulfilled expectation of increased sales, thus maintaining if not increasing their profits.

HR is just not that kind of market.

Mike

[AG3Y]

We are living in a "throw away" society. I hate to say that, because I have a house full of devices that have been around the block more than a couple of times. My main station rig is a 25+ year old Icom 720a that I shutter to think about replacing when the display finally gives out. ( Blue florescent, anybody know of a replacement ? I don't )

The manufacturer's excuse is "technology is always racing ahead of product lifespan". That may be true, but why should I buy, for instance, a 3+Ghz computer with a gazillion bytes of RAM memory, the latest 3D Video monitor, Windows Vista(tm) a hundred USB ports ( btw, what ever happened to parallel and serial ports ? ? ? ) when all I want to do is send and receive SSTV pictures, and chat with my friends using soundcard protocols like RTTY and PSK-31 ?

If computers are getting to be so advanced, when are they going to come out with one that I can say "Hello Computer" like Scotty did in a StarTrek movie, and it will respond? Until they get there, I really see no reason to be throwing away my "antiques" !

I can remember getting fed up with having the XYL complaining about the "old amplifiers" that were taking up room on the back porch. So I threw away a Dynaco Stereo 70, and two Dynaco Monoblock amplifiers! It was only when I started buying and selling on E-Bay, when I found out how much I could have gotten for those three amps ! I don't blame her. I didn't do my research before I acted in haste !

I agree with you guys about the technology vs quality issue. And just wait till all the stuff that is put together with lead-free solder now days, starts to self-distruct because of the "whisker" issue ! ! !

73, Jim

[WA9SVD]

::



I agree that while high-tech whiz-bang stuff is all really cheap now, it's also really cheaply made.

Thousands of Collins S-lines from the late 50s and 60s are still in service, 50 years later.

Let's see how many "anythings" electronic built today will still be running in 2058.

WB2WIK/6

I only wonder if it's the "electronics" that are poorly constructed, or the mechanical interfaces that suffer from extremely poor (and cheap) design and implementation. it's often the "pressure sensitive" switches, keypads, charger connectors, etc. that actually go out; while the electronics are still viable.
Of course, if it's toast, it's toast, and it matters little what part of electronics fail if it can't be repaired. It's all considered "disposable," and not always simply because repair isn't cost-effective; we've been brainwashed to a certain extent by the commercial establishment that it's more "convenient" to toss something in the trash and buy a new item, rather than reusing it. Of course, that equates to higher sales and profit for them

[WB2WIK]

When I was in Nebraska Furniture Mart there were *HUGE* numbers of people doing just that! No, they weren't asking what the positive NPV interval was for the product line, they were comparing prices and features. The manufacturers offering the lowest prices with the best features were getting the attention. The salesman said they were selling the Onkyo packages like hot cakes because you just couldn't beat the price/feature combination. *THESE UNITS WERE NOT ON SALE EITHER*. They were being sold at their suggested retail price -- AND WERE STILL BEATING THE COMPETITION.
How is Onkyo doing that? By lowering manufacturing costs and other overhead!!! And when their prices are less, IN ABSOLUTE TERMS, than prices of five years ago [b]it *is* a good deal[b]. And the consumers know that -- even if it is indirectly instead of directly.


::My opinion is, how Onkyo is doing that is by selling crap. I've never owned or heard anything made by Onkyo that was worth buying, and anything I've owned from them is at long rest in a local landfill.

Now, that might be very smart marketing, on their part, knowing that consumers don't mind buying crap as long as it's cheap...

[AG3Y]

Several of the problems that Steve referred to ARE mechanical in nature. Consider a "clicky" IBM keyboard, vs the normal rubber cup style that almost everyone else uses. I have some IBM keyboards around here that are probably 10 years old, and they operate like new, are heavily shielded for RF ingress and egress, and will probably work on any computer I ever get in the future that still has the mini DIN connector ( USB keyboards are another matter ! ) I sure couldn't say that about the "rubber cup" variety ! How many of them have you thrown away because the keys don't "work" any longer ?

I worked for a company once that tried to save a few cents on each device by using the lowest bidder's mini phono sockets instead of a slightly more expensive kind. About 30 insertions of a mini phono plug into those sockets, and they were totally useless!

Then we could talk about so-called "shielded cable" that consists of a center conductor, with a single layer of stranded conductor spiraled around the center insulator instead of being woven into place. It costs less to manufacture, but lets in many more db of hum and noise than the higher quality cable would. Does the average consumer know or understand the difference? Probably not ! But some of us do !

You use the right word. "Brainwash" !

[ab0wr]

In all consumer electronics, I notice that the QUALITY of the products always go down, while prices to obtain the same quality would be much higher as every year goes by.

Some of what you say is true, some isn't.

For instance, a Denon stereo could be bought in 1984 for about $200 that had a class A amplifier.

Total distortion is what you need to be concerned about. According to the reviews available on line the distortion levels of systems like the Onkyo I bought are not significantly worse than those of 1984, especially when considering the speaker quality as part of the system.

So I'm not sure I totally agree with this one.

A good Sony CRT television with excelent picture quality for $500 in the 80s and 90s, but today all you can get are fuzzy blurry pixelated LCD or Plasma screens for a price tag of thousands of dollars that look just horrible.

I certainly do not agree with this one. I suspect you need to investigate your media sources before blaming the TV's. Watching video games being played at home on a Sony WEGA in 460i versus even a low ball Vizio LCD in 720p just provides an eye popping difference in quality, especially in games where small details (like in Call to Duty) make a big difference in playability. The LCD's weigh far less making them much more functional as far as viewing placement.

Analog cellphones not only sounded good in the 80s and 90s, they were usually FREE with paid service.

I can't argue with this one but many will. The increased clarity of digital is *supposed* to be the reason why digital is taking over the ham bands if you listen to the ARRL.

A Panasonic "Boom Box"

Even my kids won't buy a "boom box" today. I'm not even sure who does.

tim ab0wr

[KI4NGN]

And now we are back to the rationalizations of volume being a cause of the intersection of supply and demand instead of a result of the intersection of supply and demand.

In a competitive market volume is a *result*, not a cause.

And I just love the rationalization that profit margin has to be higher in a low volume unit than in a high volume unit.

Why?

If you make 17% net profit aren't you making 17% net profit?

What you all have been and are still are postulating is that the manufacturers like Icom have a *fixed* total amount of net profit they expect to make on the product line. If they don't think they are going to sell many then the markup per unit has to be very high to reach that *fixed* amount they expect. And then, somehow, that price stays the same over the entire life of the product whether they actually reach that expected "fixed" profit level whether they exceed it.

I've NEVER been involved with a product where the total net profit for an entire product line is determined *first* and then that is the starting point for determining the price of the product for the total life of the product! Yet *that* is what you would have everyone believe is done for HF amateur radios by saying that "low volume" determines pricing that remains the same over an entire decade.

Again, THAT IS AN INDICATOR OF A NON-COMPETITIVE MARKET where the suppliers exert significant control over the market. In other words the demand side of the equation is no factor. In a market like that whether you get a good deal or not is up totally up to the supplier.

Remember, as LYK pointed out, using this kind of logic (low volumes set high prices) would dictate that Icom *raise* its prices as the dollar sinks against the yen in order to maintain that "low volume high margin pricing" required to make the product line profitable.

Yet that is NOT happening. That alone should be an indication of something wrong with the logic.

As LYK also pointed out, in this kind of market the incentive is to *MAXIMIZE* price because that is what maximizes profit. "Charging what the market will bear" is NOT the best strategy in a competitive market because it doesn't maximize total net profits, only net profit per unit. If you follow this strategy in a competitive market you will lose market share, and therefore sales quantity and therefore total net profit, to someone that can maximize their efficiencies in order to price at a lower level.

Contrary to what Mike believes, if the suppliers of HF ham radios are "charging what the market will bear" then that is actually proof of a non-competitive market where the consumers *are* getting screwed because they are paying for the inefficiencies of the suppliers in the market.

Everything that has been offered up yet on here is either an economic impossibility or a a pure rationalization trying to justify the prices being paid as a "good value". From offering up excuses that ham radio projects have positive Net Present Value intervals that take longer to reach than the depreciation of the manufacturing equipment used to make the product to excuses that IC's cost more to make today than a decade ago to the excuse that manufacturers "charge what the market will bear" in a competitive market, all you guys are doing --- AND I MEAN ALL YOU ARE DOING is trying to make yourselves feel better for paying such high prices.

And now we see a change from "its a good value when considering inflation" to "inflation hasn't been around enough years to be a factor" as the rationalization de jour.

ROLF!!

NGN:

When I was in Nebraska Furniture Mart there were *HUGE* numbers of people doing just that! No, they weren't asking what the positive NPV interval was for the product line, they were comparing prices and features. The manufacturers offering the lowest prices with the best features were getting the attention. The salesman said they were selling the Onkyo packages like hot cakes because you just couldn't beat the price/feature combination. *THESE UNITS WERE NOT ON SALE EITHER*. They were being sold at their suggested retail price -- AND WERE STILL BEATING THE COMPETITION.

How is Onkyo doing that? By lowering manufacturing costs and other overhead!!! And when their prices are less, IN ABSOLUTE TERMS, than prices of five years ago [b]it *is* a good deal[b]. And the consumers know that -- even if it is indirectly instead of directly.

I just can't get over the need for hams to justify that they aren't getting screwed using all kinds of rationalizations that make no economic sense. If you enjoy it then enjoy it. Yacomwood is certainly enjoying it -- there's no doubt of that.

tim ab0wr

"And now we see a change from "its a good value when considering inflation" to "inflation hasn't been around enough years to be a factor" as the rationalization de jour."

Once again you quote, actually misquote, something completely out of context to justify your totally untenable position. Why did you leave out the part of that comment that was relating to one specific piece of gear, and relating to why inflation has not had that much impact on it's price because it hasn't been on the market all that long relative to the rate of inflation???

You do this all the time, and have done it through out this thread.

"Contrary to what Mike believes, if the suppliers of HF ham radios are "charging what the market will bear" then that is actually proof of a non-competitive market where the consumers *are* getting screwed because they are paying for the inefficiencies of the suppliers in the market."

Are you for real? You think that charging what the market will bear must be related to supplier inefficiencies? Have you ever heard of profit? If they charge prices that no one will pay, then they must either lower prices or go out of business. Why don't they lower prices, decrease their profits? Because they're in business to make as much profit as the market will allow.

"When I was in Nebraska Furniture Mart there were *HUGE* numbers of people doing just that! No, they weren't asking what the positive NPV interval was for the product line, they were comparing prices and features. "

Comparing prices and features relates ZERO about manufacturing costs: one judges the value for their dollar by comparing product features with other comparably priced items. The more feature rich perceived for the dollar, the better the deal seems, regardless of the underlying manufacturing costs and the margin set by the company, about which you are CLUELESS.

"I just can't get over the need for hams to justify that they aren't getting screwed using all kinds of rationalizations that make no economic sense. "

Isn't it amusing how you are the only one that it doesn't make sense to???

Amazing.

[N9MOQ]

I only wonder if it's the "electronics" that are poorly constructed, or the mechanical interfaces that suffer from extremely poor (and cheap) design and implementation.

Two things. First, companies have paid people who's job it is to constantly find cheaper sources for parts and materials, cheaper labor to put the stuff together, etc, which means there are people who every day go to work to find ways to make the product quality worse. And if they don't do their job and just sit around, they get fired.

Second, I bring in a perfect example...

Someone threw away a Panasonic DMR-ES10 DVD recorder because it stopped working. I took it home and plugged it in, nothing lit up, completely dead. I did a quick Google search on the model, and found many people reporting the same problem, and that a particular capacitor in the power supply was found blown open, and that they just replaced the cap and the unit was working fine.

I opened the unit I had, looked for that capacitor on the power supply board, and sure enough, the cap was blown open.

Here is where it gets interesting...

Not everyone had the same value of capacitor in their same model units!

In fact, some had TWO capacitors instead of one, and on my unit, I saw where another capacitor could have been added, but was not, and the value of my capacitor was a different value yet from what the others had found.

So, these companies probably keep finding vendors each month that supply them with the cheapest capacitors, and don't even care much about the value of the capacitors, they just use whatever they have on hand that week (that they got a cheap price for) when manufacturing these units.

I put in a much higher voltage rated cap with higher temperature rating, and the unit has been working fine for at least a month or two so far, plugged in 24/7.

[ab0wr]

::My opinion is, how Onkyo is doing that is by selling crap. I've never owned or heard anything made by Onkyo that was worth buying, and anything I've owned from them is at long rest in a local landfill.

Now, that might be very smart marketing, on their part, knowing that consumers don't mind buying crap as long as it's cheap...

I don't know what stuff you bought but this system is definitely not crap. It is a mid-level system of very good quality for a *very* good price. It's been out for over a year and I can find no inherent system problems identified anywhere on the internet.

Check out the Cnet and hometheatermag sites.

Frankly this is a lot like your condemnation of the Softrock -- no real basis in fact, just a visceral condemnation.

tim ab0wr

[ab0wr]

NGN:Once again you quote, actually misquote, something completely out of context to justify your totally untenable position. Why did you leave out the part of that comment that was relating to one specific piece of gear, and relating to why inflation has not had that much impact on it's price because it hasn't been on the market all that long relative to the rate of inflation???

Huh? The 756 line came out before 2000.

And now you are saying that inflation over the past 9 years hasn't been large enough to make a difference in the price?

Mike, you are trying to have it *both* ways and are whining when someone points out that you simply can NOT have it both ways.

Either inflation impacts the prices or it doesn't.

Pick one.

tim ab0wr

[ab0wr]

ngn:Are you for real? You think that charging what the market will bear must be related to supplier inefficiencies? Have you ever heard of profit? If they charge prices that no one will pay, then they must either lower prices or go out of business. Why don't they lower prices, decrease their profits? Because they're in business to make as much profit as the market will allow.

Being able to charge what the market will bear *is* an indication of a non-competitive market. When prices after a 9 year manufacturing run, during which that industry has seen significant productivity gains in manufacturing, do not come down then you *are* paying for supplier inefficiencies. They have apparently had no driver forcing them to be *more* efficient in order to lower prices.

No one is saying that they are charging prices that no one will pay -- that's just another rationalization you are needed to use to justify your position, a strawman, if you will.

When a supplier can maximize profit by maximizing price in order to maximize profit that market is not competitive and the consumer *is* going to pay for all of the inefficiencies such a market will have. It is a market in which the prices for units will stay at a high level over a long period of time since there is no driver in the form of competition to bring them down.

Perhaps it is a "good value" in your estimation to have to pay for those inefficiencies. Perhaps it is a good value in your estimation to pay for things in a market where the supplier determines the price without having to consider competition or demand.

It is not so in *my* world. So you continue using whatever rationalizations you need to in order to make yourself feel good about the prices you pay. Just stop asking me to believe in them -- especially when they make no economic sense whatsoever.

tim ab0wr

[KI4NGN]

NGN:

Huh? The 756 line came out before 2000.

And now you are saying that inflation over the past 9 years hasn't been large enough to make a difference in the price?

Mike, you are trying to have it *both* ways and are whining when someone points out that you simply can NOT have it both ways.

Either inflation impacts the prices or it doesn't.

Pick one.

tim ab0wr
Tim, the world is not black and white.

The slight annual inflation since the rig was introduced may in fact be reducing their margin, but being clueless about what that margin is, I have no idea what the threshold reduction would be that would require them to increase prices.

The rig has also been aging, and I imagine demand has been slowly decreasing with that age.

You discounted or ignored my post about all retailers now selling that rig with either discounts and/or rebates in some form, and that is another form of price reduction and a sure sign of an aging rig.

Hell, I don't even know if they're still manufacturing it, or if they already discontinued production with enough inventory, at current demand, to keep them going for years. I don't know, but I suppose you do.

There is so much that you have no way of knowing yet keep insisting that you do.

I said it before and I'll repeat it again: when the theory doesn't match reality, the theory is wrong.

There is no price collusion. Manufacturers track the market, noting what people are willing to pay in some general area. They set similar prices and try to compete on features while maintaining at least a minimum (acceptable) margin, but there's nothing saying that margin can't be substantially higher than that minimum.

As you noted, buyers compare feature and prices and decide for themselves which is the best deal based on the features that they're interested in.

Some pick rigs based entirely on specs. Some do so because of displays. Others because of ergonomics. Some on the reputation for quality.

All rigs in the same price range touting features for different interests.

That's also competition.

Mike

[KI4NGN]

ngn:

Being able to charge what the market will bear *is* an indication of a non-competitive market. When prices after a 9 year manufacturing run, during which that industry has seen significant productivity gains in manufacturing, do not come down then you *are* paying for supplier inefficiencies. They have apparently had no driver forcing them to be *more* efficient in order to lower prices. tim ab0wr
Where do you come up with this expectation of prices being lowered in all markets?

You seem to believe that businesses are driven to lower their prices.

They are driven to make as much profit as they can, and that is the bottom line of any business. It escapes me how you can argue otherwise.

Mike

[W3MIV]

This thread is astonishing. Only a "world-class" jerk would keep butting his head into the same wall time and again, all the while insisting that it is the very best way to rid one of a headache.

Mind boggling. Guinness-Book worthy performance if they have a section devoted to obduracy.

[WB2WIK]

I don't know what stuff you bought but this system is definitely not crap. It is a mid-level system of very good quality for a *very* good price. It's been out for over a year and I can find no inherent system problems identified anywhere on the internet.

Check out the Cnet and hometheatermag sites.

Frankly this is a lot like your condemnation of the Softrock -- no real basis in fact, just a visceral condemnation.

tim ab0wr

::Tim, you're really showing that you don't know much about this, and nearly everyone in this forum agrees.

I've owned several pieces of Onkyo crap and it's all in the landfill as previously stated. It all overpromises and underdelivers, and fails. Its primary attribute is very low cost. Here are some reviews from people who are actually technically knowledgeably users:

From Audioreview.com re Onkyo DXC390B:

"Summary:
Plugged it in right out of the box and product had a "Fatal Error" according to Onkyo tech support. Save your time and energy. I never even got to play a CD! I even spent hours researching this CD player and now have to pay to ship it back."

From Ecoustics.com re Onkyo HTR510:

"Now, Receiver HTR510:
Build quality wise the receiver is feels reasonably good. Good things, Reasonably beefy power supply with 2x 10K mfd capacitors in output stage. All capacitors used are famous Nichicon brand( No bursting capacitors problem) rated at 85 Deg C. It has clearly visible 6 channel discrete output stages attached to a aluminium heatsink though not a extruded heat sink. And it looks like the internal wiring is done with good quality wires unlike speakers.

The rear panel has three digital inputs( 1 coax, 2 optical), one switched power socket, 5.1 input, 6 speaker out put terminals and Speaker B terminal to connect second set of Main speakers. NOW, here is the problem. The Speaker B terminal do not pass thru Tone control section of the amplifier, so any adjustment you make does not affect the Speaker set B. That means there is no no way to do any kind of audio adjustment to Speaker set B.( That is not the case with my other two receivers, one low-end JVC RX6000VBK and Pioneer Elite V41). That really sucks. So I called in customer service, and they clearly stated and confirmed about it. They also confirmed that is case even with TX-SR601(What the hell?) So, it is bummer(I want to use Polk R50 as Set B for listening to Music and 6.1 setup for movies so there would not be a problem with speaker matching).

Now, The receiver is rated at 120v 5.2AMP which comes around(approx 420W RMS). So, there is no way we can pump claimed 100w X 6 Channel without any distorsion.That being said, I think we never gonna need to go more than 50% volume in normal setup. So, that one does not really bothers me.

Now, I have not completed the adjusting and auditioning the receiver yet, But I will do it and post my views on it once I am done.

Remote: Literally sucks. It could only play and stop my Sony 655P DVD changer, no forward,no backward, no disc change.. nothing) Buttons are Tiny, not very intuitive. (Of course I have Learning remote, but I have to go thru this again)."

From Epinions.com about the HT-S780:

"Piece of Junk
by acegi ,Sep 12 '07
Pros: None
Cons: Doesn't work
I bought an Onkyo HT-S780 receiver in January 2007 and it's been in the shop as much as it's been home. I guess quality problems are the reason that you can so readily buy refurbished units from Onkyo. Between the constant problems that I've had with the system, inability to reach Onkyo tech support and difficulty finding shops nearby, I'll never buy Onkyo again."

From Urban75.org:

"The verdict

We originally gave the unit a five star review, commenting, "if you're looking for a compact, flexible mini-system with loads of features and a big sound, we thoroughly recommend the Onkyo. It's a winner!"

Sadly, not long after the review had gone to print, the Onkyo developed serious problems with the CD player which kept randomly pausing.

Several discs were tried to no avail so we had to return the unit. The second unit had exactly the same problem so we got a refund, and bought the Pure Digital DMX-50 DAB microsystem instead. We strongly suggest you consider this unit before buying the Onkyo."

Bottom line:

There are not just a few, but hundreds of such reviews on line and I agree with them. There are also many very positive reviews. Read them carefully, they all rave about low cost and are written by people who have nothing to compare the products to.

Everything "works great" when it's the only one you have.

WB2WIK/6

[AE6IP]

Yeah, right. If you have the cash on hand to fund a project and the return on investment doesn't go positive for a decade you would be better off just buying T-bills with it.

Not familiar with venture capital, are you Tim?

You make blanket statements about me not knowing anything about economics and yet you *KEEP* right on talking nonsense.

Actually, Tim, the only person in this thread talking economic nonsense is yourself.

And given that you haven't even attempted to address any of the actual points I made, but instead keep hauling out red herrings, I'm pretty sure you know it yourself.

So where's your answer to my questions, Tim?

What was the NRE on each of the two ICOM transceivers we're discussing?

What is the BOM on each of the two ICOM transceivers?

How many units of each have been sold?

You don't know. You've just talked yourself into believing that the difference isn't large enough to justify the price difference based on no evidence at all.

You have no evidence to support your assertions.

[AE6IP]

[QUOTE=ab0wr;1213256Being able to charge what the market will bear *is* an indication of a non-competitive market.[/QUOTE]

only in a freshman economics text book.

[ab0wr]

Where do you come up with this expectation of prices being lowered in all markets?

You seem to believe that businesses are driven to lower their prices.

They are driven to make as much profit as they can, and that is the bottom line of any business. It escapes me how you can argue otherwise.

Mike

In a competitive market businesses *are* driven to lower their prices.

ROFL!!!!

One more rationalization to add to the list!!

tim ab0wr

[ab0wr]

Bottom line:

There are not just a few, but hundreds of such reviews on line and I agree with them. There are also many very positive reviews. Read them carefully, they all rave about low cost and are written by people who have nothing to compare the products to.

Everything "works great" when it's the only one you have.

WB2WIK/6

No, that is NOT what they all rave about. I gave you two sites to go look at concerning the new vintage of Onkyo home theater equipment.

You apparently decided you already knew all you needed to know.

Why am I not surprised?

tim ab0wr

[ab0wr]

Not familiar with venture capital, are you Tim?

This is a refutation?

This is a form of the argumentative fallacy called Suppressed Evidence. You provide nothing in refutation, no premises, no reasoning, and no conclusion. It is closely related to the Ad Vericundiam fallacy where you expect people to believe you have refuted something by merely asking a question that is meaningless.

And you expect others to accept this as a valid method of arguing?

You wouldn't even *place* in a high school freshman debate tournament with this. The sad thing is that it seems to be the only way you can argue.

Actually, Tim, the only person in this thread talking economic nonsense is yourself.

ROFL!!! Sorry, with nothing more than a flat statement to show this is true, don't expect me to be very interested in your claims.

You are a lot like Albert -- you are both trolls throwing out statements that are meaningless but which sound profound.

And given that you haven't even attempted to address any of the actual points I made, but instead keep hauling out red herrings, I'm pretty sure you know it yourself.

See what I mean? You can't even tell when your points *are* being addressed.

[/quote]So where's your answer to my questions, Tim?

What was the NRE on each of the two ICOM transceivers we're discussing?

What is the BOM on each of the two ICOM transceivers?

How many units of each have been sold?[/quote]

I don't know the specifics. I *don't* need to know the specifics. This is just another argumentative fallacy called the RED HERRING. The definition of a Red Herring? "A step in the argument or a bit of evidence that is irrelevant, but superficially appealing - a way of changing the subject illicitly.".

Here you are trying to convince everyone that venture capital is invested in projects whose interval for reaching a positive rate of return is longer than the depreciation period of both the manufacturing equipment AS WELL AS the input resources themselves.

Do you *HONESTLY* think you can convince anyone that Donald Trump would invest capital in a project that takes over 9 years to get a positive rate of return?


You don't know. You've just talked yourself into believing that the difference isn't large enough to justify the price difference based on no evidence at all.

You have no evidence to support your assertions.

I gave you the evidence, Marty. Instead of reading it you say I didn't address it. When you can go to the RETAIL MARKET and get the component you said is part of the price differential FOR A PRICE THAT IS 20 TIMES LESS EXPENSIVE than the price differential it should be obvious to *anyone* that something else is at play here.

You are just like the rest. You are looking for a Daddy to tell you that you aren't overpaying for your HF amateur radio.

All you can do is whine a cry and throw out economic theories, rationalizations, and argumentative fallacies when Daddy tells you that, NO, you didn't get such a good deal.

When I see such economic trash being thrown around as rationalizations I know I am on the right track. You guys just don't like hearing it.

Marty -- I also notice you didn't refute LYK's arguments about inflation and exchange rates over the past years having an effect in a truly competitive market -- but that they haven't in amateur radio. Once again, another indication that HF amateur radios are not being marketed in a truly competitive market.

But that's ok, you just keep on ignoring the *real* truth all the while accusing others of doing it, whether its true or not.

It's just more ammunition going in the list.

tim ab0wr

[ab0wr]

only in a freshman economics text book.

Still nothing real to offer, eh Marty?

It's what I'm coming to expect from you.

tim ab0wr

[WB2WIK]

No, that is NOT what they all rave about. I gave you two sites to go look at concerning the new vintage of Onkyo home theater equipment.

You apparently decided you already knew all you needed to know.

Why am I not surprised?

tim ab0wr

::I looked. Not impressed. Onkyo is the Alinco of hi-fi.

My own Denon surround sound system not only outperforms it in every conceiveable way, but the reviews are 100% positive, as opposed to some positive, some negative -- with a LOT negative.

The difference is "cost." Yep, my system was $1699, and the "equivalent" Onkyo system is $399.

Yeah, right.

Read the reviews by the technogeeks, where they complain about everything from non-adjustable bass response to inadequate wiring for speakers (24AWG wiring for a 100W speaker system, that's pretty cool).

Tim, trust me: Nobody cares, and you've lost.

73

Steve WB2WIK/6

[WB2WIK]

::
Tim, trust me: Nobody cares, and you've lost.


::Amendment: If all a consumer cares about is price, you're right there.

If a consumer cares about value, you're way out of your league.

Must be lousy to live in Kansas.

WB2WIK/6

[N2RJ]

I must admit it was entertaining watching Tim and Marty duke this one out, kinda like a good superhero comic book, with a superhero and an evil villain, both of them equally strong. :D

But in this case, Marty is 100% correct, and this IS his area of expertise - embedded development for consumer electronic devices.

Of course I know Steve's electronics manufacturing kung-fu is stronger as well...

As for home theater receivers, mine is made by Kenwood, is a few (6) years old and works pretty well. Kenwood is kinda the Kenwood of A/V receivers. They make a good product that performs well, but the UI leaves a lot to be desired. I also don't think they're making A/V receivers anymore. But I'm actually fine with my current receiver, since it does Dolby Digital and DTS and has enough inputs to keep my devices happy. When we properly wire the living room we'll get a better receiver with HDMI inputs and support for the newer lossless audio formats.

For my next receiver I'm thinking of getting a Pioneer elite. To me they offer pretty good performance at a pretty sweet price point.

[AE6IP]

This is a refutation?

Nope. It's a comment on your lack of knowledge in the area.

And you expect others to accept this as a valid method of arguing?

Nope. You've made it abundantly clear that you're not paying any attention to what people are trying to teach you.

I don't know the specifics. I *don't* need to know the specifics. This is just another argumentative fallacy called the RED HERRING. The definition of a Red Herring? "A step in the argument or a bit of evidence that is irrelevant, but superficially appealing - a way of changing the subject illicitly.".

Actually, Tim, you do need to know the answers to those questions in order to be able to make the claim you made about relative pricing. There's no "red herring" there at all.

Here you are trying to convince everyone that venture capital is invested in projects whose interval for reaching a positive rate of return is longer than the depreciation period of both the manufacturing equipment AS WELL AS the input resources themselves.

I'm not trying to convince anybody of anything, at this point Tim. You don't know enough about the topic to have an intelligent discussion with. Anyone who has ever worked with a VC, which you obviously haven't, doesn't need to be convinced. They know that VCs often take a long view.

You may have forgotten, Tim, but I gave a real world example of VCs willing to wait 10 years for a company to reach break even. You can even go to the SEC web site and prove it for yourself, since we filed to go public before Microsoft bought us and the information is available there.


Do you *HONESTLY* think you can convince anyone that Donald Trump would invest capital in a project that takes over 9 years to get a positive rate of return?

Do you think Trump's a VC?

By the way, 'positive rate of return' is not the same as break even. Amazon went positive on their rate of return years before they broke even. Positive rate of return is a measure of cash flow. Break even is a measure of the difference between total investment and total return.

One of the longest times it took a building project to reach break even was the Empire State building. Go look it up. You'll find that break even in 9 years is rare in the large building business.


I gave you the evidence, Marty.

No, Tim, you didn't. You claimed that two systems used the same DSP and should, therefor, cost the same. The claim is untrue on two levels, neither of which you've acknowledged: They don't use the same DSP, and even if they did, that's not enough to show that they should cost the same.

You then want blathering on about TFT displays, making mistakes like claiming that a display that didn't exist 10 years ago was cheaper 10 years ago.

When you can go to the RETAIL MARKET and get the component you said is part of the price differential FOR A PRICE THAT IS 20 TIMES LESS EXPENSIVE than the price differential it should be obvious to *anyone* that something else is at play here.

Please show me where you can get a TFT display like that used in the 756 for fifteen dollars in the retail market.

You are just like the rest. You are looking for a Daddy to tell you that you aren't overpaying for your HF amateur radio.

Don't you ever get tired of being wrong? Nobody gives me permission to pay for my toys, and if I want to pay more than what you think they're worth, that's between me and my rather large bank balance.

All you can do is whine a cry and throw out economic theories, rationalizations, and argumentative fallacies when Daddy tells you that, NO, you didn't get such a good deal.

Pay attention, Tim. I've yet to "whine a cry" or "rationalize" any purchases. I have said that the only interest I have in this discussion is your rather complete misunderstanding of the economics of consumer electronics.

When I see such economic trash being thrown around as rationalizations I know I am on the right track. You guys just don't like hearing it.

Tim, here's another fact that's completely counter to your theory: I don't own a 756 pro III, or a 746, nor have I ever. They cost more than I personally am wiling to pay for them -- but not because I think I'm getting "screwed"; because I don't need the extra features for what I do.


Marty -- I also notice you didn't refute LYK's arguments about inflation and exchange rates over the past years having an effect in a truly competitive market -- but that they haven't in amateur radio.

It might surprise you, Tim, but I've got a day job, and haven't taken the time to refute every wrong argument in this thread. I've stuck to the bits I can do without having to double check. Besides that argument has been rather well debunked by others.

I only dropped in here because I've got decades of experience in consumer electronics and wanted to share some of that knowledge. Had I realized how unwilling you are to learn anything counter to your prejudice, I wouldn't have bothered.

But that's ok, you just keep on ignoring the *real* truth all the while accusing others of doing it, whether its true or not.

What "truth"? You're making assertions that you have no evidence to support, based on a poor understanding of the economics of consumer electronics. There's no "truth" in anything you've written, just rationalizing your own behavior. Every time you post you write another howler about economics. A man in as deep a hole as you are really should stop digging, Tim.

[AE6IP]

Still nothing real to offer, eh Marty?

Nothing that I can slow down far enough for you to follow, Tim, no.

When your argument is made entirely based on naive market theory and you refuse to read Samuelson and you make bogus claims about what DSP is in one transceiver and you have no idea how VC funding works but argue about it with someone who's in the middle of it, and you can't even tell the difference between cash flow and investment, and you cite economics papers out of context, there comes a point where it becomes clear to everyone in the room that you're not going to learn anything and they stop trying to teach you.

It's very simple, Tim. You don't know enough about Icom's cost of doing business to know whether what you call "truth" is even an accurate assessment of the cost difference between two transceivers. You don't know enough about economy of scale, or NRE, or BOM, to make the assertions you're making.

You simply want to believe what you want to believe.

When you finally understand why the phones I carry cost between 10 and 20 times more to build than the phones that we eventually sell to consumers from the same BOM, and why we sell those phones for four times the BOM, even though the cell phone business is the most competitive part of the industry, and can actually articulate that understanding, get back to me, and we can start discussing the economics of consumer electronics. Until then you're out of your league like a Babe Ruth pitcher thinking he can pitch the world series.

Maybe then I can teach you the difference between cash flow and break even and how VCs work, and what the factors in NRE costs are, and why you need to know the NRE and unit sales differences between two devices to know what the relative difference in their marginal cost is.

[AE6IP]

However, there are a couple of things to think about. If rigs such as the 756, whose price has barely changed over the years, is a good buy now due to inflation, then it must not have been a good buy when it was originally introduced. You just can't have it both ways.


I'm sorry, but what do you mean 'price has barely changed'? A couple years ago, I paid $1400 for a Pro-ii, and HRO threw in a power supply, due to an ICOM promotion. In today's HRO catalog, the Pro-iii is going for $2700, and there's no promotion. I'm pretty sure that increase in price qualifies as more than 'barely changed'.

Similarly, I paid $700 for my 706mkiig, and Icom is currently charging $950 for the same radio. Not quite as much in this case, but then the 706 hasn't been updated while the pro-iii is an update on the pro-ii.

[KI4NGN]

Tim tried to tell me that I know nothing about stock trading in another thread. He discounted or ignored the fact that I worked for Charles Schwab for 7 years.

In this thread he's telling people who have direct involvement in the page after page topic that they don't know what they're talking about, but of course he does.

Some of the issues discussed are just common sense if one acknowledges that a business's bottom line, primary goal is to make as much profit as possible. He insists that this has no relevance. He adamantly insists that in competitive markets the market does not set the price, ignoring that companies may compete on features in order to maximize profits. This is especially true in such a small niche market as HR. The volume is not there to compete on price, but Tim discounts volume as being relevant.

I like Tim, and I do admire his tenacity and passion, but he really must learn when it is time to throw in the towel and admit that he is wrong. My respect for him would go up several notches if he would stop insisting that he is right and everyone else is wrong, but I know that he won't for one simple reason: his arguments are all his justification for never purchasing a new rig, and to acknowledge that everyone else is correct would be to admit that his rationalizations about his purchases are incorrect, and he'll never do that. Of course it would be very simple for him to just say "I don't want to or can't spent that much money for a rig.", a very common, honest statement within our hobby, requiring no justification to anyone.

Mike

[ab0wr]

::I looked. Not impressed. Onkyo is the Alinco of hi-fi.

My own Denon surround sound system not only outperforms it in every conceiveable way, but the reviews are 100% positive, as opposed to some positive, some negative -- with a LOT negative.

The difference is "cost." Yep, my system was $1699, and the "equivalent" Onkyo system is $399.

Yeah, right.

Read the reviews by the technogeeks, where they complain about everything from non-adjustable bass response to inadequate wiring for speakers (24AWG wiring for a 100W speaker system, that's pretty cool).

Tim, trust me: Nobody cares, and you've lost.

73

Steve WB2WIK/6

ROFL!!!

This is a *system* design, not separate components. If they want a subwoofer with a variable cutoff then *buy* one that has it.

And who uses the little bit of wire included with *any* system like this?

Just like complaining about a Softrock you couldn't be bothered to put in a *box* ferpetesake! all you can do is complain about the difference between a $1600 system and a $400 system.

ROFL!!

tim ab0wr

[ab0wr]

Tim tried to tell me that I know nothing about stock trading in another thread. He discounted or ignored the fact that I worked for Charles Schwab for 7 years.

Yeah, and you tried to convince us that an instruction to a broker *was* the transaction! Are you *really* surprised when WA0LYK called you on this and I agreed with him?

Sounds like sour grapes to me!

Some of the issues discussed are just common sense if one acknowledges that a business's bottom line, primary goal is to make as much profit as possible. He insists that this has no relevance. He adamantly insists that in competitive markets the market does not set the price, ignoring that companies may compete on features in order to maximize profits. This is especially true in such a small niche market as HR. The volume is not there to compete on price, but Tim discounts volume as being relevant.

You do NOT[/]b, let me repeat that for emphasis, [b]*NOT*, maximize profits in a competitive market by maximizing the price of your item.

Got that? You do *NOT* maximize profit by maximizing price in a competitive market.

When you see a manufacturer maximizing profits by maximizing price you can rest assured you are participating in a non-competitive market.

Guess who the screwer and who the screwee usually are in a non-competitive market?

You are *still* wanting Daddy to approve of the money you have spent.

This Daddy won't approve. You did NOT get a good buy. You got took by a supplier in a non-competitive market.

That's too bad. But you can't make the truth go away by rationalizations.

tim ab0wr

[ab0wr]

I'm sorry, but what do you mean 'price has barely changed'? A couple years ago, I paid $1400 for a Pro-ii, and HRO threw in a power supply, due to an ICOM promotion. In today's HRO catalog, the Pro-iii is going for $2700, and there's no promotion. I'm pretty sure that increase in price qualifies as more than 'barely changed'.

Similarly, I paid $700 for my 706mkiig, and Icom is currently charging $950 for the same radio. Not quite as much in this case, but then the 706 hasn't been updated while the pro-iii is an update on the pro-ii.

Oh my God!!! The fact that the price has DOUBLED in two years means you are getting a good value today????

LOL!!!

I thought Mike said that inflation has had hardly any affect on prices over the past couple of years?

Maybe you guys should get together and get your stories straight?

So far I am still seeing nothing but random bits of rationalizations!!

tim ab0wr

[W3MIV]

So far I am still seeing nothing but random bits of rationalizations!

Then try opening your eyes.

[AE6IP]

Oh my God!!! The fact that the price has DOUBLED in two years means you are getting a good value today????

Try to keep up, Tim. I was taking about the impact of the weakening dollar. "A couple of years", by the way, is colloquial and doesn't necessarily mean precisely two.

I thought Mike said that inflation has had hardly any affect on prices over the past couple of years?

He was wrong, if he did. More likely he was thinking of a more narrow scale than I was.

So far I am still seeing nothing but random bits of rationalizations!!

You're only seeing what you want to see, and not what's being shown.

[KI4NGN]

Yeah, and you tried to convince us that an instruction to a broker *was* the transaction! Are you *really* surprised when WA0LYK called you on this and I agreed with him?

Sounds like sour grapes to me!

Tim, I'm starting to think that you have some real problems. Go back and read the thread, or I will be glad to quote the relevant parts just to embarass you some more. I didn't say that issuing instructions was the entire transaction, but was part of executing a transaction. That's irrelevant to this discussion, but more evidence of some problem.

I mentioned the little to no impact of a low inflation rate on ONE rig, and you have twice now attributed me to saying that inflation has no impact on prices. Get your head out of the sand for just a few minutes and look around.

You do more often than not seem to have a selective reading comprehension problem.


You do NOT[/]b, let me repeat that for emphasis, [b]*NOT*, maximize profits in a competitive market by maximizing the price of your item.

Got that? You do *NOT* maximize profit by maximizing price in a competitive market.

When you see a manufacturer maximizing profits by maximizing price you can rest assured you are participating in a non-competitive market.

Guess who the screwer and who the screwee usually are in a non-competitive market?

You are *still* wanting Daddy to approve of the money you have spent.

This Daddy won't approve. You did NOT get a good buy. You got took by a supplier in a non-competitive market.

That's too bad. But you can't make the truth go away by rationalizations.

tim ab0wr

Prices are set according to what the market will bear. Period.

If the market won't bear the prices that a company needs to be profitable, then they can't remain in business.

If the market will bear prices that are 100 times cost, then that will be the price. If the market will bear prices that are 1000 times cost, then that will be the price.

If two companies are in the same price range, and one's prices are 50 times their costs and the other's are 100 times their costs, both companies will be profitable, just one will be more successful than the other.

You insist that the company with the larger margin will reduce prices, reducing that margin. The only time a company will do that is if they believe they can make up the difference in sales volume, but you refuse to see that, and the fact that the HR market is too small.

No one is getting screwed because the market is indicating by virtue of sales that the price range is acceptable: people think that they are getting an equitable value for dollars spent. Consumer econonics is ultimately based on consumer perceptions: you cannot leave people out of the equation.

As others have pointed out, you are totally clueless about the HR manufacturer costs. You speculate based on other consumer electronics, but you have no idea. Speculation is fine, but you call it fact and everyone sees that.

Tim, I've said it several times now and I'll say it again.

No one is justifying what they spend on rigs.

YOU are the one who entered this discussion by stating your justifications for NOT spending on new rigs, and you continue with this argument despite the fact of reality smacking you in the face.

You are making a fool of yourself. Please stop.

Mike

[AE6IP]

This whole idea of Tim's that one is "getting screwed", is based on a significant misunderstanding of markets.

If a purchase is discressionary and the vendor sells you what they describe, with no hidden costs, it's a simple market transaction and nobody's "getting screwed."

In such a market, whether it's monopolistic or not, you can always walk away from the sale, so it's a matter of choice whether the object's value to you justifies its price.

The only way a vendor can screw you on a discressionary purchase is to sell you an object other than the one described, or to bind you to a contract with hidden costs. Both of these are illegal, but do happen.

In a market where you have perfect information, you can "screw" yourself, by buying the object for a price higher than the lowest price available to you, but that's not the vendor's fault. You can "screw" yourself by attributing a value to an object before a purchase that doesn't match your perceived value of the object once you own it. But that's not the vendor's fault either. A vendor can "screw" you by giving you imperfect information, but they can do that as readily in a competitive market as an uncompetitive one.

An object's value is different than its cost, and both play a role in determining its price. In consumer electronics, an object's value is entirely subjective, and entirely controlled by the purchaser. Its cost, on the other hand, is entirely objective, but is controlled by many factors.

A vendor attempts to increase the value of an object in two ways: by what they put into it, most notaby quality of construction and feature set; and by using advertising to convince the consumer that the object is of value.

The same vendor attempts to decrease cost in a large number of complex ways.

Competition among vendors of consumer electronics devices takes many forms, of which price setting is one of the least often used. Rather, CE vendors compete on feature mix and brand perception.

Price competition rarely occurs in CE for two reasons: similarity of cost and the joe-sixpack number. If two companies build similiar devices in CE quantities, their cost to manufacture are going to be similar because (to oversimplify) they have to buy their parts from the same suppliers. A capacitor costs, in 100,000+ units, pretty much the same, no matter who you buy it from.

The joe-sixpack number is more critical to pricing. In CE, it was long ago discovered that the vast majority of consumers have a price below which they will make impulse purchases with little research. That price varies depending on what the intended use of the object is, but for every class of CE device it's pretty well understood. The majority of consumer devices are targeted at that price point.

Unfortunately for vendors in amateur radio, the lower bound on cost of those devices is well above the joe-sixpack number, and so they're not targeted that way.

[WB2WIK]

ROFL!!!

This is a *system* design, not separate components. If they want a subwoofer with a variable cutoff then *buy* one that has it.

And who uses the little bit of wire included with *any* system like this?

Just like complaining about a Softrock you couldn't be bothered to put in a *box* ferpetesake! all you can do is complain about the difference between a $1600 system and a $400 system.

ROFL!!

tim ab0wr

::Tim, you're wrong again. The #24AWG wiring I'm referring to is inside the Onkyo speaker enclosures. Open one up and look at it. This was for a "600W" rated system (100W per channel, six channels). Turns out that particular system, measured using 4 Ohm resistive loads on each channel, has >30% THD at 40W. Doesn't drop to a respectable 5% THD until we crank it down to 15W.

Of course, that's still pretty loud, if you have a small room without a lot of open windows. But it's nowhere near meeting their spec.

WB2WIK/6

[AC0FP]

Hi All,

Just wanted to get this off my chest as I was really really irritated by the article in May 2008 QST on p. 71 titled "Selecting Your First HF Transceiver."

The author first states that his own preference would be a solid state/ tube finals hybrd, but other than some discussion of Collins, the rest of the article directs people to buy new equipment. I guess if you have a magazine that gets all of its revenue from ads, you wouldn't want to be pushing used gear.

Its just like how the record companies hated used CD stores.

But the worst part of the article is on the first page where the author implies that today's ham is too stupid to learn how to tune up a tube radio. Furthermore, he states about how "rare" finals tubes are. (For gods sake, back in the 70's when I first got my Novice license I learned how to tune up my DX-100 in no time, and I was only 11 years old.)

Well he must be living in a cave hamshack, as last I knew there were about half a dozen types of 6146B's and 6146W's on the NOS and new market. They made millions of those tubes. Heathkit used them and Kenwood used them, so there are plenty of great old radios for sale for $200 to $300 with easy to find finals tubes. I have two GE 6146's in my closet and I only own an Elecraft K2, haha.

Then there was some discussion of the "dangerous" high voltages involved. I guess that's all part of the "plastic bubble" that we are supposed to be living in now, where the county, state, and Federal Government is supposed to protect us all from ourselves.

Dear QST: "Please don't try to protect me from myself, thank you."

Sincerely, Rob.

I will try and not protect you!

This thread has gone on far to long, which may have been your intent. I got the May issue of QST yesterday and after reading the article in question I've decided the author did a really nice job of presenting the first radio alternatives.

I will assume that your post has some sort of agenda, otherwise I can not see why you wish to "trash" the author of this article.

As for the economics issues, I attended a college where the economics professors name was "Angel". Economics is far to complex to discuss in