From list@sevush.com Wed Jul 14 14:26:10 2004
Subject:inflation/cost thoughts

The straight application of inflation doesn't really apply here. IF the new
B3 used similar technology - wood cabinet, moving parts, etc., then it might
be closer. But I see this as apples and oranges because we've gone from
mechanical design to digital design.

The only mechanical components left on the new B3 would be the keyboard,
switches and case design.

Compare consumer electronics from that era, or even analog synthesizers, and
the cost savings achieved in the last few decades is substantial. A color TV
in 1973 cost significantly more than a model today of the same size and the
quality is much higher. Same can be said for stereo components. There's
obviously room to argue quality of construction, but the bottom line is that
distortion, power dissipation, size are all much lower now.

To me, this logic makes as much sense as saying an IBM XT cost $5k in 1983
and should cost $12k today because of CPI. We all know that we've got much
faster, more powerful computers for literally one tenth the price. That's
what large scale integration and powerful RISC and CISC chips do for us -
allow high volume and targeted implementation.

HS is doing exactly what they can do - starting off with a niche market for
fewer sales (new B3 for $20k, mostly for churches), then down a tier (portaB
for $8k, not as purty) and then to the larger volumes at $2k. At some point,
they might very well decide there's a tier between the XK3 and the portaB -
maybe a dual manual w/out 9 contact switches for $5k. Maybe they're watching
how the Key5 does.

But to expect them to not remove - or put in - features based on how WE
think they should market their products is a bit optimistic. As pointed out
below, Value is decided on our decision to purchase the product. A number of
people have decided to purchase the XK3 w/little or no trial - quite a
statement. I'm sure as the product gets out there more for people to try,
there will be a lot more clones for sale. I don't have the $2k+ to spare for
the purchase, but I could be swayed if I (a) had the cash and (b) could
actually PLAY the damned thing - I'm funny that way.

> using 1967=100, the Jan 1973 (around the end of B3s) US City Average
> was 127.7. In January 2004, it was 554.9. This suggests that $20,000
> in Jan 04 was $4,603 in Jan 73, around the end of new B3s. The CPI is
> widely criticized for overstating inflation, meaning it was likely
> even more than $4,603 in 1973. I honestly wasn't hip to the market
> for new B3s in 1973, but I seriously doubt a new B3 (without Leslie or
> other cabinet) was anywhere near $5,000. Older list members, please
> feel free to testify on B3 prices in 1973.
>
> As far as cost of development, that's irrelevant. Cost does not equal
> value. Cost < Value means profit; Cost > Value means loss. Either
> situation is not the consumer's problem.