Saturday, November 18, 2006

Insight into Future Business Models

Tim O'Reilly has a very interesting post, read on:

Paul Kedrosky points to an amazing analysis of the costs of the PS3 based on a teardown. He notes that "Sony is losing an astounding $306.85 to $241.35 in manufacturing and component costs per PS3, depending on the configuration." He adds: "The size of the loss per unit is, my recollection, the largest in the history of the gaming industry. It is a fairly remarkable demonstration of how the industry has changed, especially when you consider that the PS3 is delivering supercomputer levels of performance."

What I find fascinating is that this is not merely news about the gaming industry. It's potentially news from the future of all information-services-infused hardware.

Just as software is rapidly becoming free, while the services provided by that software are monetized by other means (advertising, subscription, or even, in traditional companies, maintenance), so too may "stuff" of all kinds (not just cell phones and gaming consoles) join the ranks of products supported by new business models.

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