Price fixing among tire manufacturers

In article <Btfej.1348$jX4.1062@trnddc07>,
says...
> clare at snyder.on.ca wrote:
> > On Mon, 31 Dec 2007 21:43:22 GMT, Jeff >
> > wrote:
> <...>
>
> >> Just because it is from China doesn't mean it is (or isn't) crap.
> >>
> >> Jeff
> >
> > Correct - but "good quality" stuff from China is always a crap-shoot
> > with their quality control issues.
> > Also, too many of my friends and their parents have lost their jobs in
> > the Canadian Rubber industry - BFG, Goodyear, and Uniroyal are all
> > gone now.
>
> I don't see how that is China's fault for producing a product for less.
> Of course, a lot of people who had the option of buying products made in
> North America chose ones from China instead for a few measly dollars
> less. However, the cost of the jobs lost was not figured in.

Since everyone making tires has similar raw material costs, China has
several advantages for lower cost:

1. Lower wages
2. Virtually no enforced pollution controls
3. Virtually no enforced hazardous waste disposal procedures
4. Virtually no enforced occupational health/safety regulation

Since it is a developing economy, wages will remain lower than the West,
as having an industrial sector job like making tires still pays more
than farming.

Were China to meet USA or Canadian regulations for items 2-4, their cost
advantage would be significantly smaller.

--Gene

In article <lkjej.886$nN5.202@trndny04>, says...
>
> "Jeff" > wrote in message
> news:60iej.1373$jX4.873@trnddc07...
> > Bill Putney wrote:
> >> Jeff wrote:
> >>
> >>> The American Museum of Natural History in NYC has a neat exhibition
> >>> called something like H2O - the stuff of life, that looks at how much
> >>> water people, especially Americans, use, as well as the large amount of
> >>> water it takes to grow the food to feed a cow for a single quarter
> >>> pounder with cheese compared to the water to grow crops for the same
> >>> amount of food energy say in a loaf of bread or a few ears of corn or
> >>> other vegetables (not even adjusting for the toys).
> >>
> >> But water is not permanently converted or bound up once it is used. It
> >> gets released (OK - recycled) in short order. The only thing that would
> >> make it globally scarce is if it gets bound up for long periods of time.
> >> IOW - if I use 300 gallons of water to take one bath, it's not lost. It's
> >> pretty much immediately available for use (perhaps after some
> >> processing). (and no - I'm not saying that people should use 300 gallons
> >> of water for a bath - just an illustration)
> >
> > Yet water is rarely reused. There are a few exceptions where water is
> > recycled. In some parts of California, they are planning on purifying the
> > water and injecting it back into the ground. Some people recycle
>
> Well perhaps, if you exclude the largest source of recycled water, RAIN...

Much rainwater that falls in the USA is unfit for consumption without
some sort of treatment process, due to atmospheric pollution. Often,
that treatment is performed by another shrinking natural resource,
wetlands. Otherwise, it is performed by treating the municipal water
supply.

20% of irrigated land in the USA is supplied by the Ogallala Aquifer,
which consists of water trapped in sediment during the last ice age. It
is being consumed at four times the rate it is being replaced. Should
the aquifer go dry, that 20% of (highly productive) land will fall out
of production, as it doesn't receive enough rain to be productive on
rainfall alone.

Aquifers, not rainfall, supply 60% of the fresh water in the USA, and
virtually all of them are being consumed faster than their recharge
rate.

--Gene

"Gordon McGrew" > wrote in message
...
> On Mon, 31 Dec 2007 12:00:26 -0500, Bill Putney >
> wrote:
>
> >
> >Heck - look at all the people paying 1-1/2 to 3 times more for certain
> >tires because they're "high performance tires", when those so-called
> >high performance tires get maybe 1/2 the tread life of the "cheaper"
> >tire, and that's only if those "better" tires don't become so noisy
> >after 1/3 of their tread is gone that the owner replaces them
> >prematurely, further losing what little value he paid for.
>
> Perhaps it is unintentional, but you seem to imply that
> "high-performance tires" are marketing hype. I can assure you that
> these tires do in fact provide significantly higher performance than
> standard tires, especially when the latter are bought on the basis of
> treadlife projections or warranties.
>
> To be sure there are some trade-offs, treadlife being the greatest of
> these. The need to switch to winter tires (which also have less
> treadlife, higher cost and much better winter performance than "All
> Season Radials") is another. However, consider that you have a $20K+
> vehicle, a million dollars in liability and your life invested in a
> speeding vehicle which is held on the road by four contact patches the
> size of postcards. Of course, most buyers of High Performance Tires
> want the enjoyment of driving they provide and they are willing to pay
> in dollars, road noise and inconvenience

and traffic tickets

> for that joy.
>

As long as they know what they are doing I don't care if they go
flying by me at 90Mph on the interstate on their Z rated tires that
melt away in a year. If those folks want to give the bored municipal
cops something to chase, more power to them.

Unfortunately, however, the fact majority of these "buyers of high
performance tires" do NOT know WTF they are doing, and drive
recklessly and endanger others around them on the road.

High Performance tires give you nothing on a minivan. Unless of
course your driving something like this:

http://www.turbominivan.com

Ted

"B. Peg" > wrote in message
...

>
> You want expensive tires? Try motorcycle tires that cost $200 for one and
> lasts maybe 4000 miles. Sticky rubber costs far more than auto tires.
> <damhik!>
>

:-) Yes, I also happen to own 3 Honda CB750's. (one of them which I
keep insurance and licensed year round, and I'd be riding it now if I hadn't
come down with a bad cold about a month ago which I'm just recovering from)

However, the one thing about M/C tires is you can order them online,
and you can install them yourself. Thus, relieving you of the dependency on
a bunch of local dealers in your area who all decide to set their prices the
same.

Ted

"Ed White" > wrote in message
...
>
> "Ted Mittelstaedt" > wrote in message
> ...
> > Hi All,
> >
> > I've been recently looking for tires (size 205-70-15) and I am finding
> > among the retailers that for the mileage I'm looking for (80K) and
> > the UTQGS ratings (treadwear 700, traction A, Temp B) that the
> > prices are virtually identical. The biggest difference is pricing for
the
> > road hazard warranties and for balancing, etc. from the tire dealers.
>
> Did you go to Tirerack.com and take a look at the choices they list for
that
> size? They have 40 tires listed in that size and there is a large price
> range.
>

The problem with buying from an online shop like tirerack is you can't
install it yourself - you have to involve a tire dealer to install it. If
all 4
tires are shipped out, arrive at the dealer OK, and the dealer installs them
OK and they all wear to their rated life, then your fine. And, probably the
majority of the people that buy them online have that experience. But,
your taking an added risk. For example, a tire arrives shipping damaged,
but you don't know until it's mounted and put under load. Now, you
have no recourse with the shipper because it will be too long since filing
a claim, the shipper will also claim the tire place damaged it on
installation,
the tire seller will say to go to the shipper for recompense, etc. etc. Or
if the tire fails prematurely the dealer charges money to dismount and
remount it even if tire rack gives you a free tire. Or if tire rack decides
for whatever reason to deny warranty claim, the tire dealer that installed
it since they are making minimal on the tire, isn't going to help you
fight against tire rack. I could go on and on but clearly if you buy online
instead of from the local dealer, your ability to get warranty satisfaction
should you ever need it is much less.

It might be worth assuming the risk if the tires cost $300 a pop from
the local dealer and you could get them for $100 a pop online. But for
$90 tires it's not worth it.

> The tire in their catalog with the highest UTQG is a Michelin HydroEdge
with
> a UTQG of 800 (the tire is warranted for 90,000 miles). They cost $107
> each.

Yes, which is within a few dollars of what the local dealers around here
sell
it for. No real gain from buying the hydroedge from tirerack.

> The next highest is a Pirelli P4 Four Seasons with a UTQG of 760 and a
> cost of $66 per tire (the tire is warranted for 85,000 miles).

None of the local dealers I contacted sell Pirelli's. But I will ask at a
few
others Wednesday about that tire.

> The next
> highest is a Goodyear Assurance Triple Tred with a UTQG of 740 and a cost
of
> $92 each (the tire is warranted for 80,000 miles).

The quote I have here on my desk from Sears that I got 2 days ago lists
$94.99
for that exact model tire.

> This is a range of prices
> for tires with similar tread life. Clearly, if you do a little shopping
you
> will find a wide variety of prices.
>

Yes, but check again - most of the cheaper tires in the same treadwear
rating
of that size are unknown Asian/Chinese/Korean/Japanese brands. Your going
to be hard pressed to find any reviews of them online since they just don't
have
that large a footprint in the US market.

Here in Oregon the largest vendor of Asian tires is Les Schwab. But -every
one-
of their tires (coming mainly from Toyo and Hankook) is a specialty model
that's custom built for Les Schwab and isn't available anywhere else from
anyone
else.

Now, I've dealt with LS over the years a number of times. I even bought a
set of their passenger car retread tires 20 years ago one time when they
were
still selling them. And, I even got a quote from them when I started
looking,
despite the fact the current tires on the van (which are very noisy) came
from
there. But, the very first question I asked them when the guy handed me the
quote was what was the noise level like and the guy immediately stated that
ALL the tires the sold, no matter how expensive, would be noisy, and there
was just nothing that could be done about it. Which, I knew from my
research
was baloney because people HAVE reported dramatic noise improvements
in minivans with the right tires.

In other words, the largest vendor of Asian no-name tires in my market isn't
interested in my business if getting a quiet tire is a requirement. Well,
I'll take
them at face value - Asian no-name tires are noisy, period.

In other words, the treadwear isn't really the whole story and you get
what you pay for. So, back to the grindstone of comparing apples to
apples, instead of apples to oranges.

> For popular
> size tires (i.e., high volume tires), the tires are likely to be
> manufactured locally (in the US in your case) for most brands.
>

Well, that explanation really seems to make the most sense so far.
In short, my impression that $100 a tire and $400 for a tire changeout
for a car being really expensive is a complete and utter naieve
impression. In reality, a $100 tire is a cheap tire! Ouch!!!

Ted

"Bill Putney" > wrote in message
...
> Edwin Pawlowski wrote:
> > "Ted Mittelstaedt" > wrote in message
> >> What I really don't understand is why this is the case. For example,
> >> Goodyear tires are manufactured in the US, by an American-owned
company.
> >> Michelin, and Bridgestone/Firestone tires are manufactured in China by
an
> >> American-owned company. Lastly, Toyo/Tourevo tires are an Asian-owned
> >> firm and are manufactured in Asia.
> >
> >> So, in principle, the Goodyears should be the most expensive, followed
> >> by the Firestone, then the Toyo stuff should be the cheapest.
> >
> >
> > Principles has nothing to do with it. Cost of goods sold has nothing to
do
> > with selling price. First, understand the concept of the free market
place
> > and the ability of the seller to set the price, based on what he wants,
not
> > actual costs.
> >
> >
> >> What happened to competition? Seems to me there ought to be a big
> >> case here for an anti-trust price fixing lawsuit against the tire
> >> manufacturers.
> >> Anyone have any ideas?
> >
> > Yes. Stop using logic. This is not a Communist country and dealers
will
> > sell for whatever the traffic will bear. Just because I can make
something
> > at lower cost than Brand X, there is no reason for me to sell it cheaper
and
> > not take advantage of the additional profit. Why should I bust my ass
to
> > make 100 widgets when I can make the same money making only 80 widgets?
> >
> >
>
> Exactly.
>
> Ted - What you're saying makes sense if you would be willing to do the
> following: Take your car to the first shop you came to (after all,
> competition means that all shops are equal), and tell them that you will
> pay them $X for a tire with 'Y' UTQG ratings - you don't care what
> brand, what model, as long as it has those ratings - after all,
> competition means that all tires with the exact same UTQG ratings are
> exactly equal. Heck - might as well mix and match different brands on
> different corners of the vehicle since they all have the same UTQG
> ratings and will all be the same as far as handling and such.
>

You can't do that with tires since you would void the warranties. The
warranty clauses contain exclusions enough to drive a truck through.
But other than that, yes I see what you mean. The only problem with
your observation is that most of the cheaper tires - the ones where there is
wider price variation among similar UTQG ratings - are far lower treadwear
than the 700-740 UTQG tires.

My observation on similar pricing holds for the 700+ UTQG tires. Not
for the lower treadwear rated tires. But, I think I already outlined how
the lower treadwear rated tires are a bad deal - much less bang for the
buck - and are only worth dealing with if your primary interest is in
saving cash (such as for example your planning on selling the car within
a year or so)

> Same with computers: Next time you need a computer, call up some vendor,
> tell him what the going price you're willing to pay for one with so much
> memory, so much processor speed, drives, burners, etc. - you don't care
> the brand of the computer or its components, as long as the basic number
> specs. are the same.
>

If I were to do that and name off a price that was rediculously low then I
wouldn't get a computer. But, if I were to name off a price that was
rediculously high - such as for example what Apple charges for their stuff -
then every dealer would say they had the same price and I could get what
I want from anyone. So I'm not sure how far you can carry this analogy
before it gets too silly to be usable.

Getting back to tires, now...

> Some of how you say the market should work is true. Some is way
> over-simplification. All sorts of things go into buying decisions
> (which of course drive pricing to some extent) - some things that are
> valid, some that are maybe not (i.e., swallowing marketing hype that may
> have no basis in fact, personal prejudices - " I had a real bad
> experience with a Ford car in 1968, so I refuse to ever buy one of their
> products!").
>

So your assertion here is that the tire market really isn't a commodity
market as much as I think it is. That could be an explanation for what
I'm seeing.

> Heck - look at all the people paying 1-1/2 to 3 times more for certain
> tires because they're "high performance tires", when those so-called
> high performance tires get maybe 1/2 the tread life of the "cheaper"
> tire, and that's only if those "better" tires don't become so noisy
> after 1/3 of their tread is gone that the owner replaces them
> prematurely, further losing what little value he paid for.
>
> MBA's are going to ensure that the manufacturer gets what the market
> will bear and lower direct and overhead costs as much as possible, and
> maybe cheat on specs. if they can get away with it. A smaller
> manufacturer may be in a very low cost of living area paying very low
> wages and providing crappy benefits, whereas a larger manufacturer may
> be paying better and paying stockholders, but offset by their savings in
> economy of scale making the consumer price and product performance and
> quality levels (and to some degree, profit margins) come out about the
> same as the little guy's product. If either one is out of line with the
> other too much, then one's product will be a big money loser due to low
> sales. If prices are being manipulated and the consumer blindly buys on
> UTQG ratings, yet one product is actually better than the other, whose
> fault is it when the better product is taken off the market (or the
> company goes out of business) when the consumer kept buying an inferior
> product through ignorance.
>

You see, I think this is actually one of the reasons that there ARE so many
different tire models, and that the tire manufacturers are constantly
changing
them. They know that nowadays with the Internet and such that if they
put out a crappy tire, within 6 months the name and model will be splashed
all over the place and people will stop buying them. So they are constantly
changing the names of the models and make very little attempt to build up
model and brand loyalty.

Your cereal manufacturers (General Mills, etc.) spend huge amounts of time
using the same names over and over and protecting them, since they know
they have consumer loyalty. Coca-cola found this out with New Coke -
they changed the flavor a bit and POed their customer base. So they quickly
changed back.

It seems to me that if a tire manufacturer created a model - for example the
Michelin Hydroedge - and spent the next 20 years pushing that model and
making damn sure that every purchaser of it was happy as a clam, that the
consumer loyalty built up over the Hydroedge name would be enormously
valuable. I don't understand why the tire manufacturers don't operate this
way.

> Looking at it another way, if the consumer is educated on the product
> assortment and makes wise decisions, then that should drive divergent
> products closer together with the overall trend to better and cheaper.
> If one tire with the same ratings was selling a bunch more, I'd wonder
> why they continued marketing it - there must be something that makes it
> better and causes enough people to keep buying it. But the trend
> *should* be a tighter price variation for like products. Price
> differences should truly reflect quality and/or performance in a good
> open market.
>

Right. But they don't seem to do this. Instead the second they build up
the slightest amount of consumer loyalty to a tire brand, they discontinue
it and substitute a new model with a new name.

> If it bothers you that the prices of the products are too similar, then
> use the power of your wallet and buy the better product that's selling
> for the same price as the inferior product - even though the UTQG
> ratings are the same or similar.
>

Well that is what my goal is. But it's like playing wack-a-mole. To
me the only real worthwhile guide to the better product is testimonials
from people who have actually bought them and put them on their vans.
But most testimonials out there on the Internet, even ones that are no
more than 2 years old, seem to be for tire models that are no longer for
sale.

It's like the entire name of the game here is to keep the tire consumers
from knowing what the hell is really going on.

Ted

On Mon, 31 Dec 2007 23:47:33 GMT, Jeff >
wrote:

>
>I would like to see your evidence for this. For gasoline, most of the
>cost is the crude oil, refining, transportation and cost of selling the
>fuel, like operating the station and taxes. For electricity, it is for
>the coal, oil, or carbon-containing substance or uranium or the cost of
>the dam, windmill, or solar panels, the cost of transmission and the
>cost of billing.

Mostly taxes. And don't forget theprofit demanded by the shareholders.
The price of Gasoline has VERY little to do with the cost of crude.
>
>For computers, almost all the cost is the cost of the raw ingredients
>(e.g., CPU, motherboard, disk drive) and putting the computer together.

Don't forget the HUGE advertizing budget of companies like DEL, HP,
APPLE and others.
Today you are pretty close with your assessment, but 10 - 20 years ago
you would have been SO off-base!! The price you paid for a computer
had everything to do with what the public was WILLING to pay, and
nothing at all to do with the cost. I was in the business then. I SAW
the OBSCENE profits made by some companies - particularly in the
higher end mini computers (bigger than PCs).
>
>For paper, the biggest cost is trees and processing the tree at the
>paper mill.
>
>For car and trucks, the cost of making the vehicles is a major
>determining factor in the price of the vehicle, however, some cars get
>much higher prices than the cost of the vehicles, and for others, like
>GM's EV-1, the cost of the car was not related to the cost of manufacturing.
>
>For all of these things, market forces do play a major role. For
>example, if Dell could sell its $1200 notebook for $1500, it will. And
>if it costs ExxonMobil more to suck its oil out of the ground than it
>can buy crude oil for, it will buy the crude.
>
>There are other things where the cost has nothing to do with the cost of
> the product, like cell phones, which are basically an advertising
>thing to get people to buy cell phone service. And for prescription
>drugs under patent, the cost of manufacturing drugs has very little to
>do with the price of the drugs (actually the cost of marketing the drugs
>- essentially kickbacks to docs, dividends for stock holders and the
>price of development are the main costs). The cost of food crops (e.g.,
>grain, corn, milk) has a lot more to with outside forces, like market
>forces and government subsidies than the cost of growing the crops.
>
>>> What happened to competition?
>>
>> Gets a lot of lip service, but companies & CEOs hate it in real life.
>
>Of course they hate it. Would you rather sell cars when there are only
>three makers or many more (lets see, Ford, GM, Chrysler, Diamler,
>Mitsibushi, Toyota, Honda, Hyundai, Kia, Subaru, VW, BMW, Fiat,
>Alfa-Romeo, Nissan, Isuzu and Mazda all sell cars in the US, but there
>are more, like Cherry who would like to sell in the US as well).
>
>>> Seems to me there ought to be a big
>>> case here for an anti-trust price fixing lawsuit against the tire
>>> manufacturers.
>>> Anyone have any ideas?
>>
>> Just between you & me, I'd save my energy. Look around for your best
>> deal and get the tires you want.
>
>Good advice.
>
>> Have you considered how little gasoline prices differ regardless of
>> where the oil comes from, where it's refined, the price the oil co. is
>> actually paying for its crude by virtue of its futures contracts, etc.?
>
>That's called "market forces." For a commodity, the cost of
>manufacturing matters little for the cost of a particular brand.
>
>> It's a good way to drive yourself mad if you worry about it too much.
>
>Perhaps you have been worrying too much about it. Sorry, couldn't resist.
>
>Jeff


--
Posted via a free Usenet account from http://www.teranews.com

On Tue, 01 Jan 2008 00:05:53 GMT, Jeff >
wrote:

>clare at snyder.on.ca wrote:
>> On Mon, 31 Dec 2007 21:43:22 GMT, Jeff >
>> wrote:
><...>
>
>>> Just because it is from China doesn't mean it is (or isn't) crap.
>>>
>>> Jeff
>>
>> Correct - but "good quality" stuff from China is always a crap-shoot
>> with their quality control issues.
>> Also, too many of my friends and their parents have lost their jobs in
>> the Canadian Rubber industry - BFG, Goodyear, and Uniroyal are all
>> gone now.
>
>I don't see how that is China's fault for producing a product for less.
>Of course, a lot of people who had the option of buying products made in
>North America chose ones from China instead for a few measly dollars
>less. However, the cost of the jobs lost was not figured in.
>
>> I'll still buy Canadian/American and even Euro and Japanese before
>> I'll buy Chinese.
>
>One thought that comes to mind is do you really need to buy it all? I
>mean, kids have so many toys, do they really need another toy from the
>fast food restaurant, especially when the toy is often made with some
>plastic from our used electronics (by "our" I mean the US's, for the US
>is the only country that allows its waste electronics to be shipped
>overseas to be recycled into lead-laden toys). It seems to me that we
>have too much stuff that we don't really need. Kids need toys -- that's
>how they learn, but they don't need a new cheap toy with every meal.

I grew up with few toys, and made quite a few for my younger brothers
and sisters. They have WAY too many today, and too few that exercise
their magination, their mind, or their body.
>
>Also, when it comes to food, I prefer local, because it takes so much
>energy to transport food half-way across the country or even half-way
>across the world. Energy is one commodity the world is using more and
>more of every day.

Not to mention local is picked at the peak of freshness, where
imported is picked green, and never does get the same flavour.
>
>The American Museum of Natural History in NYC has a neat exhibition
>called something like H2O - the stuff of life, that looks at how much
>water people, especially Americans, use, as well as the large amount of
>water it takes to grow the food to feed a cow for a single quarter
>pounder with cheese compared to the water to grow crops for the same
>amount of food energy say in a loaf of bread or a few ears of corn or
>other vegetables (not even adjusting for the toys).
>
>Jeff


--
Posted via a free Usenet account from http://www.teranews.com

On Mon, 31 Dec 2007 21:38:26 -0500, Bill Putney >
wrote:

>Jeff wrote:
>
>> The American Museum of Natural History in NYC has a neat exhibition
>> called something like H2O - the stuff of life, that looks at how much
>> water people, especially Americans, use, as well as the large amount of
>> water it takes to grow the food to feed a cow for a single quarter
>> pounder with cheese compared to the water to grow crops for the same
>> amount of food energy say in a loaf of bread or a few ears of corn or
>> other vegetables (not even adjusting for the toys).
>
>But water is not permanently converted or bound up once it is used. It
>gets released (OK - recycled) in short order. The only thing that would
>make it globally scarce is if it gets bound up for long periods of time.
> IOW - if I use 300 gallons of water to take one bath, it's not lost.
>It's pretty much immediately available for use (perhaps after some
>processing). (and no - I'm not saying that people should use 300
>gallons of water for a bath - just an illustration)
>
>Bill Putney
>(To reply by e-mail, replace the last letter of the alphabet in my
>address with the letter 'x')

True, BUT, the water, when used, reduces the amount of FRESH water
available. This is particularly true in areas like where I live
(Waterloo Region, Ontario Canada) where we depend heavily on
groundwater.

Any water used and returned to the rivers etc lowers the watrer table
and reduces the amount of water available from wells.

It IS a big consideration, and a problem - particularly when we have a
dry summer like we just had - more than a 30% drop in rain from normal
- which is generally JUST enough.

--
Posted via a free Usenet account from http://www.teranews.com

clare at snyder.on.ca wrote:
> On Mon, 31 Dec 2007 23:47:33 GMT, Jeff >
> wrote:
>
>> I would like to see your evidence for this. For gasoline, most of the
>> cost is the crude oil, refining, transportation and cost of selling the
>> fuel, like operating the station and taxes. For electricity, it is for
>> the coal, oil, or carbon-containing substance or uranium or the cost of
>> the dam, windmill, or solar panels, the cost of transmission and the
>> cost of billing.
>
> Mostly taxes. And don't forget theprofit demanded by the shareholders.
> The price of Gasoline has VERY little to do with the cost of crude.

Really? I see what you mean. I mean it's not like when oil was $40 a
barrel, the price of gasoline was cheaper. Oops, it was.

<http://inflationdata.com/inflation/Inflation_Rate/gas_vs_oil_price_comparison.htm>

>> For computers, almost all the cost is the cost of the raw ingredients
>> (e.g., CPU, motherboard, disk drive) and putting the computer together.
>
> Don't forget the HUGE advertizing budget of companies like DEL, HP,
> APPLE and others.

In the fall, Dell had net revenue of about $15.6B and selling costs of
about $2B or around 6% of sales (3 months ending 2 Nov 2007). The cost
of this revenue was about $12.8B. The cost of the revenue included the
cost of the parts, the cost of assembling the computers, the cost of
shipping the assembled computers across the oceans, the cost of the
workforce and the cost of the plants.

> Today you are pretty close with your assessment, but 10 - 20 years ago
> you would have been SO off-base!! The price you paid for a computer
> had everything to do with what the public was WILLING to pay, and
> nothing at all to do with the cost.

You're so full of crap! The price had nothing to do with the cost? I
hate to tell you this, but very few companies sell their goods for less
than it costs them. Those that do, don't do so for long.

> I was in the business then. I SAW
> the OBSCENE profits made by some companies - particularly in the
> higher end mini computers (bigger than PCs).

The same thing is true today. If Dell could charge $4000 for a computer,
it would. But, the problem is that HP, Levono, Acer and others will sell
the same computer for about $2000. Guess where the costumers go.

IBM and other companies are making a nice profit they way they made
profits years ago: in services (like web services) in addition to the
cost of the computers they sell.

One of my New Year resolutions is not to keep responding to people who
say nonsense. When you are able to say something that makes sense, I
will respond. Until then, bye bye.

Happy New Everyone!

Jeff