Watching this discussion on the price of computers my thick head has a
couple of obvious questions which come from a comment by a friend who said
"Watching a parachute decend one cannot understand either gravity or air
resistance, but one needs both gravity and air resistance to understand the
falling parachute, and the recognition that one is watching a all three in a
state of disequilibrium. In equilibrium the parachute is on the ground,
gravity keeps it there, and air resistance is of no importance." With Intel
processor chips selling at hundreds of dollars, and costing only a few dollars
to produce, is there not a role for the gravity of the labor content and the
air resistance of temporary market power in explaining the trajectory of the
price of the various components which make up a "computer"?
As for Hard Disk prices, the June 1994 issue of PC World (p. 208) has a table
on the price of hard 300Meg and up hard drives. The prices run from a low of
$0.63/meg (1080Meg Conner) to a high of $1.32/Meg (526Meg Areal Tech).
Since the "cost of production" here includes the relatively constant cost of
getting the drive from the production line to the sales counter, it may be
that the relatively narrow cost band around mean=$0.95 (sd=.18), is mainly
a function of nothing that has to do with the "cost of production and little
to do with the labor content of the drive itself. It may have something to do
with market forces. Hard drive prices fell sharply in the weeks before DOS 6
came out with its ill-fated (in terms of ownership/performance) diskdoubler
software. Competition was at work there, just as air resistence is at work
until the parachute hits the ground. (Note: my first 10Meg hard drive was
about $1,300 in todays dollars, or 2 thousand times as costly per Meg)
Sam Lanfranco, [EMAIL PROTECTED] York University <Wrongsizing test site!>
