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From: MRC%PANDA@SUMEX-AIM.ARPA (Mark Crispin)
Newsgroups: net.micro.atari
Subject: facts about marketing
Message-ID: <12174475176.8.MRC@PANDA>
Date: Sat, 11-Jan-86 17:29:31 EST
Article-I.D.: PANDA.12174475176.8.MRC
Posted: Sat Jan 11 17:29:31 1986
Date-Received: Sun, 12-Jan-86 13:03:31 EST
Sender: daemon@ucbvax.BERKELEY.EDU
Organization: The ARPA Internet
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     There are several ways you can build and market a computer
to replace (or compete with) some other computer:
(1) build a better machine and charge more
(2) build a better machine and charge the same
(3) build a better machine and charge less
(4) build an equivalent machine and charge less
(5) build an inferior machine and charge less

     Many people are confusing Atari's actions with strategy (3).
The problem is that you fail to consider medium-to-long term
market forces.  In general, the industry has provided a 30%
price/performance increase every 2 years.  In the micro industry,
it's closer to 30% every year.  Another way of looking at it is
either an order of magnitude price decrease in 5 years, or an
order of magnitude performance increase in the same period of
time, or a combination of both.

     Atari's marketing strategy leaves them with no way to
maintain the curve they have set.  The value is almost guaranteed
to go down with little or no significant equipment enhancements.
This is fine for throwaway computers (a.k.a. toy computers), but
not for serious computers.  A software developer writing a
serious application is going to want the machine to be on the
market for some time so his software product would be saleable.
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