Wednesday, February 8, 2012

The Hardware and Software Price difference-2

The same thing happens with the Phone plans; you can buy a phone for either free or pay for one and get the three free only if you sign up for the phone company's plan for two years with early termination fee usually the cost of the phone itself. So actually they are subsidizing the cost of the phone through the phone plans. As everybody knows, no business exists to lose money and if you think that they are losing money, they are making on something which you cannot even think about it. Since it is really a trade secret that how a thing cost to make in Asia, you will never know if the company is creating a loss leader in order for us to buy their other regularly priced stuff or not.

My point is that the prices should not be so astronomically high that the difference between the hardware and software becomes ridiculously absurd. I mean you can earn a profit but don’t kill the small person in the process that the only way to get your hands on is to share one software with many people like it happens in poor countries. But every year I have seen that as the price of the Hardware keeps dropping, the price of the software goes on the opposite side. Until we know how much it really costs for the software to develop and how much margin they charge on each software, it will be up to the market to decide how much it can bear to sell that software, which in individual cases is very negligible but on the corporate side, there is a captive market to sell at whatever price the average company is willing to pay for licensing that product.

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