The Customer Doesn't Exist
I've already complained in numerous posts about how expensive food is. Y'all know gas is $5 a gallon. The cheapest new car is 40k. Blah blah blah.
But what about stuff nobody needs? Like fun stuff? Well, given the need to retain customers you'd expect the big boys out there to come up with affordable options. Right? Apparently the opposite is on the table these days.
You would think that the goal for most companies would be to sell items the majority of people could afford in order to make money to keep the company afloat during an economic crisis. That seems like a logical thing to me, but I don't have a degree in math so I apparently don't understand logic at all.
Last week Sony unveiled three new Walkman MP3 players. Sorry, DAP's. Digital Audio Players crammed with state of the art chipsets and software capable of rendering bits of code into a flawless recreation of a live instrument recording. The downside? They are thousands of dollars. They run Android like most other high end players so users can access streaming apps. These things are for people with headphones that have such high resistance they need an external amp.
But what about like, regular customers? The folks who use $25 earbuds. The folks who just want to listen to music and podcasts without a phone and the interruptions/distractions/surveillance that includes. Well, I guess SONY doesn't want to compete with the Chinese brands on Amazon selling $50 modern iPod styled MP3 players. Instead you get a brick of gold plated copper because it has better fidelity. The hell are you people listening to that needs this? Jazz recordings done in the 1960's? Come on.
All I see online are how people want small offline players they can fit in their pocket, that can plug cheap earbuds into, and not worry about it. Light transparent plastic with a minimal screen and physical buttons. Drop it? It's fine, no glass to break. You aren't out thousands of dollars.
I was under the impression that the goal in business is to sell something to customers. Selling a handful of expensive things to a select few customers is viable. But at what point does it make sense for every company to be doing this?
Who are these customers?
SONY is out here making thousand dollar consoles and ultra high end FLAC players. Car companies only build the top trim models leaving the only options on the lot tens of thousands above MSRP. And yes, a chunk of this issue is the cost of chip production. Companies just can't afford to out bid each other to get theirs made first, driving up the base price. "Sorry we can't make them for 6 months because we took on a billion dollar job from a data company that paid us with unsustainable funds, but we can rush it for $$$ extra." That extra gets moved on to you as the customer and now the things you need cost more or get delayed just because of a processor or sensor module.
So great, now you have companies that can only make money by selling expensive stuff because everything defaults to a high production cost, might as well go all out and use solid milled copper in the housing. But there is a threshold that people won't go over for certain things.
I ran up of a bill of materials to make my own MP3 player. Just the prototype with no enclosure ran up to $100. Nothing moderately close to an end user product within a sane price range. Now, if I made the mp3 player and put it in a hand crafted silver enclosure with diamond encrusted buttons, then yeah I can charge whatever crazy amount I want because then it's an art piece and not a commercial product for everyday consumers.
Are there enough ultra high end earners out there to keep everything afloat while we wait for production costs to cool off? I'm not super sold on the idea that billion dollar companies can't afford to produce economy goods during a consumer cost of living crisis. It feels like companies are making products for customers that don't exist.