[net.audio] programmability

wjm@lcuxc.UUCP (B. Mitchell) (04/23/85)

A $100 list price difference between a programmable and non-programmable
CD player does not imply a $100 difference between manufacturing costs
(even manufacturing costs with R & D loaded in) between the two units.
I suspect the actual parts price difference may only be $5 or $10 (for
the extra buttons and components not on the main control chip - the
chips for the two versions are probably identical - they just don't hook
up the programming leads on the budget model - to spread the development
cost over more units) but then you have the inventory costs of stocking
different parts for the two models (that cost the same - like instruction
manuals and faceplates - but have to be different for each unit) and the
inventory cost for stocking two different models.  The small difference
in dealer cost gets amplified by the standard percentage markup to give
the larger difference in list price.  Also, remember that list price is
set by the manufacturer's estimate of what will maximize his profits, which
is not only related to cost, but also to sales estimates.
Regards,
Bill Mitchell (ihnp4!lcuxc!wjm)