Digital BW, The Print

johnny999_99 wrote:

> Well Keith
>
>
> 1.  We have at least four very large players in the market.  If you
> agree that they compete among themselves, then I believe your whole
> argument evaporates. 

No it doesn't you are ignoring the issue of vertical, as opposed to 
horizontal, market control..

> The companies can only price their products,
> printer+consumables, such that they recveive a fair return on the
> capital invested.  If Epson gives away it's printers but charges $300
> for cartridges, they are unlikely to do well in the marketplace. 
> People will buy from one of the other suppliers because they have
> considered the total cost of the product.  The ability to charge
> infra-marginal total prices is constrained by the presence of
> competition. N'est ce pas?

Not exactly... Consumer, rationally, should consider Total Cost of 
Ownership.. The reality is, they often consider ONLY upfront cost..

>
>
> 2.  The fact that Epson has "chipped" its cartridges (a measure that
> has already been defeated)is proof that the entry barriers to 3rd
> party cartirdge makers cannot be particularly high.  The story that
> you quoted speaks to the high market share (11 percent)of these 3rd
> party vendors.  I am having trouble seeing this as a difficult market
> to enter.

Antoi-competitive Lawsuits by EPSON and Canon have made it tougher..

>
> So, we have a market where the incumbents are competing among
> themselves and where 3rd party vendors can easily enter the higher
> profit, consumables segment.  No wonder no-one is entering the
> printer market.  I'm thinking that this might not be a ripe target
> for price regulation.

We aren't talking real price regulation here... What we are talking 
about is prohibiting dumping the printer and then balancing out the cost 
by making consumable costs unrealistically high... I've alread addressed 
how that becomes and effective bar to entry..

>

[Keith]
 
 

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