How Much Are You Paying For Electronics Labels?

An anonymous reader writes "Interesting article on CNET about different consumer electronics brands selling identical OEM products, often at wildly different price points. The author also examines the phenomenon of manufacturers releasing "consumer" and "industrial" versions of the same product -- with the cheaper version aimed at businesses. Probably old news for the slashdot crowd, but it's worth reading to see how much Middle America is overpaying. Caveat emptor, indeed." And there are also product lines where the expensive version is aimed at business buyers, because a higher price implies greater credibility.

Comments

Old News Indeed

[DynaSoar]

Old news indeed. I knew this to be the case in TVs when I worked for my father at his TV store in the 60s. It was especially prevalent in home stereo equipment in the 70s and 80s.

The major manufacturers create their own "competition" to flood the market with at the most popular price ranges, often selling under 4 or 5 labels simultaneously, and not all of them at the same price level, despite identical guts. Three major Japanese manufacturers accounted for 14 brands at a "super-store" I visited on a research jaunt, back when I sold the stuff.

Want an eye opener? Go find out who obtained the patents on VHS and Beta VCR systems. Not the current patent/license owners; the creator sold the license for one of them to a competitor, so that no matter which format "won" they'd still be making money.

Re:Old News Indeed

[Kurt Russell]

As someone who has worked in a Cadillac-Buick dealership I can tell you "MOST" gm products are the same.
Look in any professional service manual, you won't find Buick, Olds etc; you'll find "j body" "b body" "F body" and so on.
The difference is in trim packages.

Re:Old News Indeed

[MbM]

Adding this to the userContent.css in mozilla or firefox should clean up most of it:

td[bgcolor="#A69D78"] { background-color: #006666; }
td[bgcolor="#EBEBE1"] { background-color: #CCCCCC; }

td[background="//images.slashdot.org/slashcor ner-it.gif"],
td[background="//images.slashdot.or g/slashbar-it.gif"] {
background-image: url(//images.slashdot.org/slashbar.gif);
}

bod y[link="#A69D78"] a:link,
font[color="#A69D78"] { color: #006666; }

(note, due to slashdot lameness you may need to remove extra spaces)

Re:Old News Indeed

[ryanwright]

If they're anything like Sony, they're all borderline. Sony products have gone to hell.

Worse than that, the bastards don't honor their warranties. When HDTVs were brand spankin' new, I spent $4,000 on a large Sony set. Came with a "Red Carpet Warranty" that guaranteed repair within a week and replacement with a new one if they couldn't repair it within two weeks.

Day 2 of ownership, the TV breaks. Diagnostics report a bad circuit board. No problem, so I call Sony. The tech takes 2 weeks to get here. Then he beats the guns on my $4,000 set with the back of a screwdriver, tells me "this tv is too new, the service manual isn't out yet" despite the fact that I had downloaded one the day before (how do you think I knew how to access the diags?!). I tell him this. He says no, he's going to replace one of the guns. Of course now the TV is much worse than before - all three guns are damaged from him hitting them for over an hour. Oh, and parts are going to take another month to arrive.

So I call Sony to get my replacement TV. "We're sorry sir, we can't do that." Uhm, what? I have a piece of paper right here that says you will. "Sorry sir. We don't have a TV to send you." After half an hour of arguing I called Best Buy up and told them to come get the set. Bought a nice Toshiba instead.

I haven't required service on my Toshiba, but I did call their warranty department before I bought it and faked like I had a broken set. They answered the phone within a couple of minutes - Sony was over an hour on hold every time. They were polite and promised to fix my TV right away (that's when I confessed I really didn't have one, but that they had just made a sale).

I will never again buy another big ticket Sony product. Never. If I'd had the time, I would have sued the bastards for not honoring their warranty. But since it happened so soon after purchase, I had Best Buy on my side, so no need.

Re:Alienware

[Anonymous Coward]

Wrong.
Sager resells Clevos, just like Alienware. Although, the latest Area-51m is a Uniwill I believe.

Another dell example

[rabtech]

If you want to get even cheaper on managed switches, SMC gear is the exact same thing that Dell is selling at half the price.

You see Accton makes a ton of unmanaged and managed gear. They sell bigtime to the OEM market, and they also make most of Dell's stuff.

Who owns SMC? Accton.

Crack the cases and look at them side-by-side and it all becomes clear. Buy Dell and you pay twice as much for the same exact switch. Buy two for the same price as the Dell and you have support that even Dell can't beat - an always available spare!

This is no different

[jeffkjo1]

This is no different than the automobile industry

Ford = Mercury = Lincoln
Chevy = GM
Chrysler = Dodge
Honda = Acura
Toyota = Lexus = Scion
Volkswagen = Audi = Porsche

The automobile family tree runs back over itself in so many different ways. Ford owns part of Mazda, and they both produce an identical SUV... with different name badging.

Re:This is no different

[Osty]

Ford = Mercury = Lincoln

= Mazda = Volvo = Aston Martin = Jaguar

Chevy = GM

= Pontiac = Oldsmobile (dead now) = Cadillac = Saab

Chrysler = Dodge

= Mitsubishi = Mercedes-Benz

Toyota = Lexus = Scion

= Chevy = GM (well, not quite -- Toyota rebrands the Cavalier in Japan, but otherwise there's little sharing between the two companies)

Volkswagen = Audi = Porsche

And this one is wrong. Volkswagen = Audi, but not Porsche. While it's true that Dr. Ferdinand Porsche started Volkswagen, and the Pieche and Porsche families have controlling interests in both the VAG (Volkswagen Automotive Group, including Audi, Bentley, and Lamborghini) and the PAG (Porsche Automotive Group, which is just Porsche), the Porsche car company is independently owned and is not part of Volkswagen. Parts and platforms are shared (the original 356 engine was a VW, as was the engine for the 914; the Boxster and 996 share relays and other mechanical parts with VW and Audi models; the Cayenne and the Touareg are built on the same platform; etc), but the companies are not the same. In all of your other examples, the companies are partially or fully owned.

The automobile family tree runs back over itself in so many different ways. Ford owns part of Mazda, and they both produce an identical SUV... with different name badging.

And it's only getting smaller. Gone are the days of many different manufacturers (for example, the single company Audi, which is now only a part of a larger company, started life as four independent companies -- thus the four interlocked circles of the Audi badge), but even back in the early days of automotive development there was a lot of "cross-polination". For example, Dr. Ferdinand Porsche helped built a number of early cars long before he built the first Volkswagen (and even longer before the first 356). Among others, he did plenty of work for Mercedes-Benz and the German military (the Panzer Tiger was designed by Porsche). Porsche still does non-Porsche design work today, such as the engine on the Harley-Davidson V-Rod (this by the Porsche car company, and not the independent Porsche industrial design company).

That's not to say that the different badges don't bring something more to the table. I doubt you'd object that a Lexus ES500 is more luxurious than a corresponding Toyota Camry, or an Acura TSX compared to a Honda Acura. The platforms may be shared, but in many cases the "up-market" brand model will have a larger engine, better suspension (either tigher or softer, depending on the goal -- sports car or luxury car), fancier interiors (leather, woods, metals instead of plastics and vinyls), more options (navigation, sound options), etc. That's not always the case, since many Chevy and Pontiac cars are exact matches minus body cladding (Grand Prix and Monte Carlo, especially before the late-90s/early-00s body redesigns of the cars; Camaro and Firebird prior to the cancellation of the F-body line; Cavalier and Sunfire; etc), but Cadillac is GM's upscale brand, and it shows. The Cadillac CTS (not CTS-V) may be nearly identical to a Chevy Impala, but the CTS is going to be more luxuriously appointed. Perhaps not enough to justify the $10,000+ price difference, but enough to justify some increase in price.

Re:consumer versus industrial electronics

[Kiryat Malachi]

Usually industrial parts are bin-sorted, because suppliers get it through the nose if their parts fail during a QA run (I've watched a Fortune 50 company refuse to do business with a chip house until they fixed some issues with one of their processes - Wal-Mart tactics get used all over). As a result, if the manufacturer can't guarantee the spec by design, they'll bin-sort.

On the other hand, at least for chips its unusual for there to be any difference between the parts other than the guaranteed temperature ranges (consumer is usually 0-70c, industrial is usually -40 to 125c, and military is usually -50 to 150c). Industrial parts come at a minor premium over consumer, while milspec parts come at a major premium over industrial.

So, to make it short - 90% of the time, ICs are bin-sorted and sold as binned. Every once in a while, you'll come across a consumer part that runs like an industrial, but its rare.

Re:Service and Volume are the factors

[seanadams.com]

I'll comment on this since I've reverse-engineered both products.

They accomplish EXACTLY the same thing but the two products run completely different hardware AND software. Linksys does this so that they can pit one vendor against another until neither makes any money.

The wireless gaming adaptor uses a MIPS clone from SiliconData with integrated PCI and ethernet interfaces and a Mini-PCI 802.11g card.

The WET54G uses a Ubicom processor (same as what's in the WET-11 except 160MHz instead of 120MHz. It has a Davicom 10/100 MAC and a Cardbus 802.11g card.

Both probably cost exactly the same to produce, but having two designs gives leverage on the supply side and the ability to justify two vastly different price points on the shelf.

DEC's $27.000 disk drive

[rfc1394]

Back in the 1970s, Digital Equipment Corporation (DEC) sold mainframes, minicomputers and various components to go with them. One of which was a 100 MB disk drive, which was about the size of a washing machine. It also cost (then) $27,000. It was also possible to purchase disk drives that would work the same as DEC's from the company that was considered the best disk drive maker in the world, Control Data Corporation (CDC), for about $7,000, plus you had to spend about $700 for a controller card (DEC's drives had the controller built in.)

It was commonly said about DEC equipment was that it was good stuff, high reliability and well built, but expensive. One oft-repeated comment was "We'd love to be an all-DEC shop but we can't afford it."

Apparently someone who owned both the expensive DEC drives and the less expensive - but still extremely reliable - CDC drives decided to take a look and see why the DEC drives were so much more expensive. They had to do some preventative maintenance on one anyway so they decided to look at both of them. So they disassembled both and checked them out.

Apparently what it was, was that DEC put together a high quality drive, added some electronics to it, and built their own from that. And what did DEC use for the high quality drive that they sold for $27,000? The very same $7,000 drive from Control Data!

Re:Paint too

[nelsonal]

A friend worked at LambWeston (a potato processor) who sold fries to most fast food stores. McDonald's picked the most rotten spuds, while Arby's and BurgerKing had the best spuds. The translucent crispy part of a McDonalds fry is rotten potato. The current secret to McDonald's fries is a bit of sugar mixed with the salt. If you don't believe me add some to the next batch of fries you get, they will taste just like McDonald's with a bit of sugar.

Re:Not just electronics

[anticypher]

Although the batteries may come from the same manufacturer, and probably all from the same batches, there is a difference. At the end of the manufacturing step, the batteries are carefully tested using some precision electronics to measure things like internal resistance and impulse current. The subtle differences at that stage reveal whether a battery will die earlier or last longer. That is what determines which reseller label gets applied. The higher margin, well known brands will take bin 1 or bin 2 cells, lower margin store brands like to buy bin 5 or bin 6, which have a slightly lesser capacity. At the low end are the cells from bins 8 or 9, which will have a shorter shelf life, and die after a small amount of use. Those low quality cells tend to end up included with toys and other cheap consumer goods sporting a generic label.

The differences between the best and medium quality is not much, but the reject cells can be pretty bad.

the AC