Wednesday, February 20, 2019

Consumer choice in the tech industry (part 3)


It's unfair, however, to blame the companies for this. They need to stay competitive, and they need to stay in business--to do so, they need a way to generate a steady profit. Otherwise, they can't continue to make the products we enjoy and pay the workers that research and make them. But think for a moment about a company that makes something like a handheld game console such as the PSVita or a smartphone. If the product is good, it will sell well--for a while. However, after a certain amount of time, the user "install base" (those that wanted the product and bought it) will begin to saturate. Just about everyone that wanted that product will eventually have one. After that point, how is a company going to keep a revenue stream going from that particular product? One common solution is to make a new and improved version of the product, which is common in the smartphone market. Another solution is to charge monthly subscription fees to use it, which most major software companies are now doing for products like Adobe, Photoshop, Finale, etc. How is this affecting the consumer, though?

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