Miklos A' Vasarhelyi

1
Miklos A. Vasarhelyi

• The Technological Paradox

2
Semiconductor Producer Revenues
3
Strange behavior

• Computer Associates introduced its personal
  financial package Simply Money, by giving the
  first million copies free
• Toshiba admits that its new digital film project
  will never be profitable

4
Strange behavior (II)

• order services from Teleport and they will
  install a dozen of optical fiber cables with a
  million times the capacity you need, for no extra
  cost
• you may pick up Netscape navigator or McAfee
  virus detector for free on the Internet

5
Strange behavior (III)

• the Wall Street Journal on-line is giving three
  months free usage subscription for new users
• you may pick up free stock quotes and financial
  information on the Internet

6
Strange behavior (IV)

• you may get free electronic newsletter from ZD
• Pointcast may be downloaded free and will provide
  free news, sports, and entertainment

7
New principles

• the only thing that matters is that the
  exponential growth of the market be faster than
  the exponential decline of semiconductor prices
  (Eastman Kodak)
• in 1994 Americans spent more with PCs than with
  TVs

8
Disappearing

• 10 year plans
• product cycle controls
• clear distinctions between wholesale and retail
  markets
• large systems sold by only one manufacturer (IBM)

9
New rules

• more than creativity agility and speed
• redefinition of what is value in an economy where
  the cost of technology is falling to zero
• earlier or later technology will take the value
  of any hardware or software to zero

10
Many strategies will win

• dominance and control
• Intel e Microsoft
• selling 'commodities
• disks, memory chips
• Packard Bell
• establish a standard and progressively increase
  it
• Hewlett Packard's laser printers
• Gateway

11
New rules

• products are worth more when they are cheaper
• earn money giving things out for free
• team work is essential with high tech
• tailor made products mass produced
• Dell (computers), Matsushita (mountain cycles),
  Levis (jeans), Ford (automobiles)

12
New Rules (II)

• accelerate and waste
• don't be afraid of market retractions (but do not
  copy Apple Computers)
• Novas Rules (II)

13
PCs costs of ownership over 5 years
14
Conclusions

• the miracles in the development of optical fiber
  will be parallel to chip development
• can you loose money in each sale and still earn
  money with the product?
• emphasis on the client attention not on the
  technology of the product- stress on the interface

15
Conclusions (II)

• the cost of the parts will not be important in
  the cost of the product that includes service and
  future changes
• mass produced tailor-made products
• the science of waste
• products that arrive quickly to the market