I would be stunned if the median laptop purchased from Dell cost more than $750 before tax or was used less than three years. I think you're significantly overestimating that - maybe it's the median cost of a MacBook, but with the $1K MBA as good as it is, I even doubt that.
> Maybe for those who have lots of money to spare, they might be willing to pay as much for incremental increases in convenience, but I doubt that applies to most people — even in rich countries.
The cost of a product is more closely related to the cost (e.g. labor) of producing it than how useful it is. My mattress was purchased online for less than $200 and shipped. It's lasted almost a decade before showing any signs of age. That's maybe $25 a year for something I spend almost a third of my time using! By that standard, I shouldn't even be willing to buy a computer, which has a higher cost / value ratio.
Doesn't really work like that, of course. Competition acts to keep prices down, but this only operates within a product market, not between different markets. Most stuff is much cheaper than would correspond to the use we get out of it, thankfully. Expensive writing tools are targeted towards people who can definitely afford them, and they manage to get away with enormous profit ratios in part because they're in niche markets with little competition between products. They're a rare exception where the price has trended closer to the value to users rather than the cost of production.
> I would be stunned if the median laptop purchased from Dell cost more than $750 before tax or was used less than three years.
Fair… I was just trying to be generous in the cost estimate, but this just makes my point stronger.
> Competition acts to keep prices down, but this only operates within a product market, not between different markets.
That’s an interesting perspective. Reminds me of something I read — that home computer prices have straddled the $1K price over decades even though their usefulness has multiplied. It seems like there’s some other perspective that anchoring prices, AB’s whatever that is also tends to value hardware more than software.
> Maybe for those who have lots of money to spare, they might be willing to pay as much for incremental increases in convenience, but I doubt that applies to most people — even in rich countries.
The cost of a product is more closely related to the cost (e.g. labor) of producing it than how useful it is. My mattress was purchased online for less than $200 and shipped. It's lasted almost a decade before showing any signs of age. That's maybe $25 a year for something I spend almost a third of my time using! By that standard, I shouldn't even be willing to buy a computer, which has a higher cost / value ratio.
Doesn't really work like that, of course. Competition acts to keep prices down, but this only operates within a product market, not between different markets. Most stuff is much cheaper than would correspond to the use we get out of it, thankfully. Expensive writing tools are targeted towards people who can definitely afford them, and they manage to get away with enormous profit ratios in part because they're in niche markets with little competition between products. They're a rare exception where the price has trended closer to the value to users rather than the cost of production.