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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.
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.
"I may be synthetic, but I'm not stupid." -- Bishop 341-B
VCRs were one of the first I heard about to do this... one motherboard, vendors enable the features that they want for each model, depending on their marketing strategy.
The price difference might be caused by the different level of services attached to a product.
On the other hand, businesses are more likely to buy in bigger quantity, or at least buying more regularly.
Uselessful technology (Air-Charged
The poweredge 400sc is the same as their top of the line Dimension model bit in a less flashy case. The Poweredge in a minimum configuration costs about 349$ The Dimension you can't get for cheaper than about $1000. They do the same (or at least did) with their laptops. My Inspiron 4100 has been reflashed (by me) with the Latituce C610 bios so I can use the docking stations (with pci slots). Dells precision line is the same as well. Their precision notebooks are latitudes and inspirons but with a FireGL or Quadro card (which you can order separately from dell and stick in your laptop yourself) The desktop precision systems are the same as well. Just a Optiplex or Dimension with a good video card.
another big example is Alienware, but its Sager Notebooks who create the laptops for them.
... but this is not a big deal. The example cited in the article should come as no surprise to anyone: a "business class" plasma TV without speakers or a tuner would naturally be cheaper than the "consumer" version which has these features.
The extra $330 dollars is the value to the consumer for not having to go and buy a separate tuner and sound system.
This is one of those "filler" stories you see on websites when there isn't enough real news for real journalism.
A friend of mine worked in a factory that made liquid soap. She ran a bottling machine. She said there would be batches of hundreds of bottles at a time. Each batch would have a different label, and would sell at a different price in the store. But they were filling them with the same slop from the same tank.
Unknown host pong.
about the same as those Nike trainers,starbucks coffee,Gap Shirt,Armani Trousers
its called branding, the selling of dreams
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!
Natural != (nontoxic || beneficial)
Ever wonder why Radio Smack stopped carying its "Optimous" brand of stereo and AV equiptment? It was all made by RCA. Now, they just cary the RCA brand on the shelves.
Isnt this like the whole "Frosted Mini-Wheats" VS. "Frosted Mini-Spooners" (Brand X) debate? I think a Kroger grocery store billboard in Richmond VA put it best. There is a picture of a field of String Peas plants on a farm. In the middle is a LARGE string pea sliced open. On the left is an arrow pointing to the top pea in the pod which says "National Brand" while the pea in the middle has an arrow on the right pointing to it which says "Kroger Brand".
Not too off-topic: I tried to convince my CIO that we could save money by using 7-Zip instead of licensing Winzip (not at the point to recommend Open Office or Linux yet) and he turned it down because "Winzip is the trusted name in ZIP compression", WTF, its actually PK's format! Dont even get me started on his views of PDFCreator vs. Acrobat.
Im dreaming ofa big bndwdth, That can resist the
For example, the Panasonic 42" plasma had a "consumer" and an "industrial" version. However, the article pointed out that the industrial version was $350 lower than the consumer version while glossing over the fact that the industrial version lacked an HDTV tuner, and built-in speakers. Clearly, the addition of those items justifies some increase, and 2-400 is reasonable given the cost of HDTV tuners as separate components.
In addition, he neglected to mention the difference in warranty duration (and the difference in customer service you might expect between a "name" brand such as RCA and a "generic" such as Coby).
No, really! I'm one of the *good* lawyers!
This whole article seems rather pointless. So much to the fact that any high school student who has took an economics class (required at many high schools) will know this simply as price disrimination. It happens in many different markets. Why would the technology market be any different?
Nothing to see here. Move along.
Brendan
ConsumerReports.org
I used to have a subscription to the magazine. It was quite useful. Now, unless something is really a lot of money, I don't research the purchase anymore. I just buy the cheapest thing that will do the job. That usually works fine.
In Canada, we have a publication called LemonAid. It gives really good information about buying new and used cars. It is published by the Automobile Protective Association. I won't buy a car without checking it.
The bottom line is that we are not completely helpless in the face of manufacturers' bs.
*cough* IPOD *cough*
I'm one of those "gifted" kids that can "change the world" if I'd get off my ass and stop reading slashdot.
People like to think there exists "out there" some "objectively correct" price.
That's a complete myth. The "correct price" is what the seller is willing to take and the buyer is willing to give. Everyone is different.
Some people value a product more than others and are willing to pay more. By creating different versions of essentially the same product, the maker can get appropriate compensation for those differences in value.
What's interesting is that something can be uneconomic at all single price points but profitable to all with discriminatory pricing.
When marginal cost is considerably lower than average cost it is possible to consrtuct scenarios with counter-intuitive properties, including competition being bad for consumer prices.
In the 80's I worked in a commercial photo finishing lab -- the place your film gets processed when you drop it off at a grocery store.
They charged more to develop ISO 400 film than ISO 100 film. The explanation was that the customers thought that since ISO 400 film was more expensive, it would be harder or more costly to process it.
But the fact was that all C-41 films went through exactlythe same process. In fact, it costs less to process ISO 400, because more silver is recovered for recycling during the process.
So the conclusion is, they charge what people are willing to pay.
but the practice exists in many fields.
A good example is medical devices and products. All you need to do is slap the term "medical" ona product and double or triple the price. Cheap rolls of 22" wide paper become exam table covers, manila folders become medical chart binders, and medical billing software companies always try to force you to buy their own equipment, all for a little extra lagniappe.
Don't even get me started on the price of a tablet of acetaminophen given in the hospital.
I once bought a 20" TV in Canada, which was really cool because it had a message feature, where you could type in a message and have it scroll across the screen at a particular time. I moved to the USA, and the same make of TV (and model number) didn't have this feature :(
Vintage computer adverts: http://www.vintageadbrowser.com/computers-and-software-ads
That's backward, it's usually the business version that has a jacked up price.
If something claims to be for industrial or business use, normally it costs at LEAST twice what the consumer version does.
These guitars were *exactly* the same from brand to brand, with the exception of colors, and some minor details (shape of pickguard, knobs, pickup covers).
Harmony brand usually sold for more money, followed by Sears and Wards even though the guitars were exactly the same.
When Japanese guitars started showing up for much less, there was much more 'spread' as many of the cheaper models were outsourced overseas. After some time, the industry shook itself out and the cycle began anew.
Now many of the old names are owned by the Japanese, and it is a similar situation.
This theme is pretty (good job with the gradient logo!) but it's too low-contrast. White text on light brown/gold and light brown/gold text on white are both tough to read. Slashbots: please fix!
Dear Slashdot: next time you want to mess with the site, add a rich-text editor for comments.
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.
Be careful here. A product that look exactly the same might not be. It might even be made in the same factory from the same parts. But electronics go thorugh a lot of testing along the way in manufacturing and the cheaper ones might be produced with looser specifications. It might even be "outlyers" from the core product.
For example if the brand name version has a spec on some output that calls for 40-50 (insert unit of measure here), units that come off the line with 35-39 or 51-55 might go into the "low cost brand" bin. They still work, but they're not opimal quality.
It's also very easy in electronics to disable features, depopulate boards, etc. Buy a million 5% resistors. Sick the ones closest to nominal in the brand name product, stick the others in the discount product. So, maybe the picture quality isn't as good. You saved fifty bucks, so don't complain.
-S
--- What parts of "shall make no law", "shall not be infringed", and "shall not be violated" don't you understand?
1. "Products that are more highly demanded are sold for higher prices! Film at 11."
2. insert rant on advertising and its harmful affects on consumer welfare
3. submit to slashdot
4. insert hackneyed, trite cliches and catchphrases.
5. ???
6. Profit!
beware the jabberwock, my son! the jaws that bite, the claws that catch!
That concept pisses me off, whether it's the basis of a pure capitalism or not. Maybe it's the hard-wired instinct for "fairness" that we share with monkeys, or maybe it's the impossibiity of implementing such an idealized system. Or maybe it's because my idea of "what I'm willing to pay" is cost of stuff + cost of labor + reasonable profit. Anything more than that is gouging, and anything less is most likely subsidized by the gouging.
Who knows? I still don't like it. Why *can't* we all pay the same reasonable price? Why is artificial price differentiation and illusory competition through rebranding and repackaging of identical products a good thing for anyone but the companies succeeding in the gouging end of the spectrum?
Maybe there's a good reason I'm not an economist. On the other hand, maybe there's a good reason this doesn't work perfectly now-- people hate it, and some of them even bother to shop around to find the lowest price.
Here's an example, but in the OPPOSITE direction. A relative of mine works for a large company that makes batteries (the one with the tinted hare).
They make alkaline cells for a myriad of companies. Walgreens, Radio Shack, Wal-Mart, Albertsons, the list goes on and on.
According to him (he used to work as a production manager in one of their large plants), the batteries made for other customers were actually tested MORE than their own name brand, since the potential damage was greater if they lost one of these big accounts due to excessive warranty claims.
So the cheaper generic batteries are actually slightly better quality than the big name ones, but not by much. Funny how that works out.
Sometimes you'll see a retail store advertise a product, such as a dishwasher, with the claim that they'll match the price if you find it lower at a competing store. The fine print says that it must be the exact same model number. What they don't tell you is that the manufacturer's model number is exclusive to that store chain so it's impossible to find that *exact* model number at a competing store.
A friend of mine worked a summer job in a paint factory where they canned spray paint. He loaded labels into the machine. Same cans of paint, it was the labels that determined whether it was a high end brand or some random house brand.
I worked a summer job in a plant that processed and canned pickles. We put sliced pickles in 5 gallon buckets and slapped Burger King, Long John Silvers, Wendy's, etc labels on them. Interestingly, the only one that was different was McDonalds. They had a special recipe for spices, and they were the 800 pound gorilla, so they could make the suppliers make special batches for them.
It's also interesting to see what misleading labelling makes people think they're getting more when they're getting less.
I had a friend who owned an electronics dealership. He sold camcorders, among other things. He showed me a shady practice done by at least one camcorder manufacturer. A fictitious example; if he sells, say, a CRV-510 camcorder, the same manufacturer will also make a CRV-515 model, and it will only be sold in large lots to big box resellers like Best Buy, etc. The consumer will see the "bigger model number" and assume it's a better model. It will look identical, and will superficially perform the same. It will probably have some cheap, useless feature that's implemented 100% in firmware (like more fade/wipe patterns or something) so they can have more bullet points on their box.
However, it will have hidden things that are not generally touted which will be inferior; the CCD will have 100,000 less imaging pixels, the S/N ratio of the video amps will be a bit less good, the D/A converters will be cheaper and more noisy, or something. Nothing that Joe Sixpack would even know what you're talking about if you mentioned it. But they'll think they're making a smart purchase buying it at Wal*Mart, and be convinced that the mom & pop down the street are just trying to rip them off.
I saw a great show on the History Channel about the history of the gasoline. Long story short, there are two types of gasoline pipes used to transport, dedicated and community. Dedicated transport pipes transport only one brand gasoline, and I believe Texaco and someone else has their own dedicated lines.
The rest use a pipe network that takes 14 days to send gasoline from one end to another. The system is setup that you can put in X gallons at one end and extract X gallons the same day from the other end, in effect it shares gas.
The caveat I alluded to is when gas companies extract the gasoline from the pipeline, they do add in additives to improve performance, help maintain seals, et al. However, the additives are for the most part the same too.
They don't have 3 gas pipes for each grade, 87, 89 (91 if you have it), or 93. They have one pipe, and they have to send all different octanes through. The gas does mix and when the transition gas (there's a proper name for it) is extracted (it doesn't go in the tanker truck), it's sold to other companies that don't care about octane ratings, that just want gas for industrial purposes.
This practice is called third degree price discrimination. Basically it indicates that an economist working for the company has separated the market into two or more segments. Through studies, they have determined that the price elasticity of demand is different in each of these segments. (this means that a 1 percent change in price in each of these markets will produce different changes in demand for the product). Because of this, it is possible to maximize profits by selling the product in the two different markets for different prices. (since firms sell at the price where marginal revenue is equal to the marginal cost of producing one more unit of the good, it is to their benefit to separate this marginal revenue for the two different markets, as the market that will accept the higher price will increase profits significantly.) An example economists like to give is selling goods at an airport. People are willing to pay more for the equivalent good at an airport for the convenience of having that good now, while they wait for their plane.
You think Levi jeans are any better made (from a practical point of view) than a no-label pair picked up in a department store?
They USED to be, but not anymore. They used to be serious work wear, made in the US, and would last years. At some point, Levis started to be marketed as fashion. At some point shortly after that (and partly due to pressure from Wal*Mart), they outsourced their production to Asia and cut their standards from "farmer/carpenter wear" to "teenybopper/yuppie wear" - now they tear just looking at them, same as all the other cheap crap. You need to buy Carhartt now to get good work wear.
I've been eyeing this combo CDRW & DVD drive for my CD burning / DVD watching needs. I was in Futureshop about a month back, and noticed the same exact drive in their computer section, above a sign that read this price. I assumed that this was wrong, and pointed it out to the guy behind the counter.
"No," I'm told, "that's the correct price."
"But I can buy that exact same drive for about $75 online - don't you think that $120 is a little expensive?"
Once the guy finds out that it was NCIX that had this price, he starts ranting - yelling basically - about authorized distributors, and how as an authorized distributor, Futureshop doesn't have to match that price - besides, NCIX doesn't guarantee their products!
"Yes they do," I tell him, "plus they don't yell at their customers for asking questions."
At this point I walked away to pay for my purchase, and the cute girl at the register asked me how my visit to Futureshop was - I replied that it would have been great except for the jerk in computers, who I pointed out to her.
"That's the manager, sir."
In-effing-sane. Like I said to my buddies when I recounted this story, there's a serious problem somewhere in the supply chain when the same product costs 50% more at one location than another - somebody is getting screwed, and given the choice between the two retailers, I'm going for the one that causes less damage to my wallet.
I don't need to be made to look evil. I can do that on my own. - Christopher Walken
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.
---
Mod me down, you fucking twits. Go ahead. I dare you.
(I read with sigs off.)
I pay twice as much for business phone service as residential, coming into the same house.
BellSouth tried to sell me "business" DSL for well over twice the residential price. This is no joke. They sent a thing to my wife offering DSL for $45/month, and two days later I get a telemarketing call on my business line offering the same speed DSL for $90. I asked her why I should pay that when BellSouth was also offering the same thing for $45.
First, she denied it. Finally she admitted it, but said that the business service was better. Why? Because if they had to send out repair, I'd get next day for business but it'd possibly take a few days for residential. Gee, is there possibly a better way to back yourself into a corner?
So the obvious question: Is your DSL service down so much that this would affect my buying decision? I love it, she had two choices: "yes, our service sucks" or "no, you'd be wasting your money."
She settled with "no" and ended the call.
Plenty of companies want to charge you more for services if you're running a business.
Do you have ESP?
Many of the above comments are about how brand name companies make the same thing under different names, and sell them for different prices, sometimes with different marketing schemes.
;) ) getting advice to raise their prices- Americans believed that the prices were so low that the quality had to be lower. They rose prices and took in cash.
There's a bunch of marketing stories about how if there are two products, one cheaper, one more expensive, that are about the same, most people will go for the cheaper one. Add a new one more expensive than the top one, however, and the old top (the new middle) dramatically increases in sales.
And there's the story about Taco Bell (a fast food chain here in America, for you barbarians
Most of the time these stories are basically saying "THESE COMPANIES ARE LYING TO US!!!". Some times they are commenting on percieved human stupidity, which is what we call it when an emotional system finely honed for survival in the wild proves mildly susceptible to some new cunning analysis and we don't take the most logical path.
I want to give another point: you are, in some cases, watching the free market help the little guy. This is private industry giving "welfare", a strong discount to those who can't afford the pretty name. Buying batteries and poor? Well, you aren't getting worse batteries, you're just paying less. The only real currency we have is emotion, and we are witnessing poor people "paying" with emotion in comparison with rich people- they can't necessarily get the cool name, and good packaging and the warm feeling it produces. But, they aren't getting screwed with a product that blows up or fails or is just crap!
I used to hate this, but then I realized that if it bugged me so much, I could just buy non brand name products all the time. Or I could just shut up and buy Duracells and help support an industry standard that actually has beneficial side effects to those with less money, without making me feel like it's picking my pocket.
This could be a lot worse. This is in many ways noble.
I have that camera. The electronics are by Panasonic, the lens by Leica. As far as I know, both cameras are the same product, just sold under different brands. There may be some small differences, I don't know for sure, but I doubt it. I think they just decided to team up and both come up a product that they can sell seperately, but where they're each in their core competencies.
Compare:
SMC TigerSwitch 8624T
Dell PowerConnect 5224
NetGear GSM7324
DLink DGS-3324SR
Well, that's all of them, except for Linksys, which is just rebranded Cisco equipment.
And of course, they all use COMPLETELY DIFFERENT firmware. Lovely.
THIS THING CAN TURN ON A DIME, MACROSSZERO STYLE ALSO FUCK BETA, ~NYORON
Based on what? If I notice that both Wal Mart and K-Mart trucks are driving out of the same lightbulb factory, what exactly are they going to point to in the law that would prevent me from sharing that information with others?
ABSURDITY, n.: A statement or belief manifestly inconsistent with one's own opinion.
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!
The lessons of history teach us - if they teach us anything - that nobody learns the lessons that history teaches us.
Hmm. Sucktastic is not exactly accurate, and neither is the parent.
Sager does not make laptops for Alienware. The truth is that both Sager and Alienware obtain their laptops from the same Asian supplier, Clevo Computer Co. of Taiwan.
And speaking as an owner of a Sager8886, I think that the Clevo products have their niche. They are not designed to be ultra-portable notebooks for business roadwarriors. They are supposed to be fairly mobile workhorses. They make some sense for power gamers who frequent W/LAN parties and for developers who need every last scrap of processing power. I bought mine originally, because I work with large client-server apps. I used every bit of CPU. The performance was very good, and the only problem I encountered in 18 months of 10+ hours of hard use was a shoddy backlight for the LCD. This problem happened twice though and was pretty goddam annoying.
However, I have recently shifted my thinking. My workplace purchased a stacked IBM ThinkPad T40P for me. It's light and wonderful. My Sager8886 is now becoming a heavy (8.5 lbs) computer that I don't want to use. If it were lighter, I'd lend it to my girlfriend, or it could be my Linux road companion. If it were a desktop, I'd upgrade it and use as a file server or testbed. But it fits in some middle-ground.
From now on, I'm going to buy the lightest, slimmest laptop that will accomplish what I need it to do. In 30 months, when that laptop is no longer able to play the fastest game and might not be a good development environment, it WILL still be a useful, convenient laptop for word processing or web browsing.
That's my opinion.
This is essentially the #1 reason why you won't see me out shopping, expect on very rare occasions... Shopping, comparing specs and prices is difficult enough without having to look-up the circuit diagrams for each product to make sure you're not getting crap from someone else.
I bought a Sony CD-RW that turned out to be a Lite-On... If I had wanted a Lite-On, I would have got one, for less... Instead, I try to go with a halfway decent brand, and get screwed. Not just because it's rebranded, but I avoid no-name junk because it typically has problems. Without going into details, Audio-CDs have to be burned at 4X, and you can't get it to burn at any speed other than 4X or 40X.
So, what's the end result of rebranding???
I'm not buying ANYTHING from Sony EVER AGAIN. I don't trust any name brands, so if I'm going to get crap, might as well be the cheapest, from a no-name. I don't have any way to know I'm not getting crap, so I buy nothing from anyone until I REALLY need it. I don't have a DVD-RW yet because of this.
Basically, I'm avoiding buying anything until I find some way I can know I'm not getting junk. I would go on a shopping-spree if there was a store around here that made sure they don't carry junk. Instead, absolutely every store has given-in to the Made-in-China junk market, and sells whatever is cheapest, even if it doesn't work as advertised. I would stick to a certain brand if they were consistently good, and reasonably priced (not necessarily cheap, just not insanely expensive).
Okay, I'm more or less ranting now, but it's true. Companies are all to happy to sell-out their long-term future in exchange for a short-term jump in revenue, just long enough that they can sell-off their stock, or find a job at another company they can pump and dump.
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
This also applies to rebranded girlfriends. I have had more than a few, and have found that there are not too many manufacturers. What happens is the get built in groups at 3 factories in holland. The only thing they change is the trim level.
I tested out the slick trim package, but it lacked a little in performance (and was quite expensive to repair).
I then tested some budget models. Some performed well, but I was embarrased to be in them.
Finally, there was a brand called "Wife". The trim was pleasing, but not flashy. Fairly low maintenance costs (buying beats leasing, because of the higher milage). I only wish I could point you to a dealer that carries them. Unfortunately, they go out of business as soon as the first deal in done. Sometimes they open up shop again, but who wants a used one?
Price Discrimination is fairly common in almost all industries. But it is extremely common in industries where there are large initial capital requirements in R&D, compared to the marginal cost of production (such as microprocessors, automobiles, and pharmaceuticals).
Before 200 years ago or so, price discrimination was standard operating procedure, as most products were haggled for. The seller would haggle to determine the highest price the buyer is willing to pay.
The industrial revolution, telecommunications advances, and the rise of the catalog store (such as Sears) made it less advantageous to haggle with every customer, and the standard price became popular. Imagine haggling with your checkout clerk at the local grocery store.
But price discrimination never went away. "Price skimming," charging higher prices to early adopters, is standard with consumer electronics. Brand and off-branding is another means of price discrimination, as is pricing by region or country.