From wes@page.ca Sun Oct 26 16:50:44 2014
Subject:Re: Neo Ventilator 2

Actually, I thought the business model was pretty clear -- make as much
money as you can. :) They offer an expensive product, get as many sales
as possible; then offer a cheaper product to get the bottom end of the
market without carving out too many sales from their more profitable
product, then offer a new and improved expensive product...This is pretty
typical in the tech field! :)

BTW - I bet the manufacturing cost difference between the Mini Vent and
Vent II is about $50. That would, in a typical market, translate to a $150
MSRP difference. Maybe a little less if Neo is handling distribution
themselves. More if they consider the more expensive product a "premium
brand" equivalent.

And I am one person, at least, who does not think Neo is charging too much.
How do I reach this conclusion? Simple: I look at sales volumes. Neo is a
business, not a charity. If they cut their prices in half, they would have
to sell probably four to six as many units to make the same amount of
money. But I doubt they could!

The good news for the value-minded customers is that, eventually, they will
be able to a sufficiently-good Leslie sim at a moderate price. All they
have to do is wait for either the used market to get saturated (because of
Vent III, Vent IV, etc) or more competition to get good enough. I imagine
both Hammond-Suzuki and Roland (BOSS) will have decent enough sims on the
market in the next 10 years. H-S knows theirs needs to improve; BOSS has
already shipped the RE-20, Roland has sim IP in the V-Combo organ line AND
the KC amp line. Probably their Atelier organ line, too.

Oh, which reminds me, sorry, Craig - I misread your initial post. As for
R&D paid for - if we look at what I would charge (250K) plus what I think
the hardware R&D was worth (50K), and if we recoup $50 of R&D per unit
shipped (wich would be HUGE), then Neo would have to ship 6,000 units to
break even on R&D amortization. If Neo developed the Vent for less than
300K they are doing really well (didn't pay the founder, start-up
style?). I wonder how many original vents have been sold. Would serial
numbers clue us in? Maybe I should go digging for their annual reports
(assuming they are incorporated). Hmm.

Wes