Re: RE : [cobalt-users] Re: USB drive on Raq4

[Lyle Scheer <lyle.scheer@xxxxxxx>]

On Fri, 2003-10-17 at 08:26, Alain Fontaine wrote:
> Hello,
> 
> That's a very interesting way of thinking. One question pops up - from what
> cost on would these people have said "no, it's too expensive for something
> that is of no use". Or, put the other way around - how much money would you
> throw out of the window before it starts to hurt? ;)

Well, the argument for adding the USB connector was that it was of
potential use with minimal cost.  Certainly the trace on the PCBA was
basically a no cost adder, the actual connector being populated on the
board was a bit harder to justify... if you're building something for
low cost, you do want to justify your nickel and dimes.

The early Cobalt boxen, back before Cobalt became Sun, had a pretty high
margin... close to 50%.  That means it cost Cobalt about half of what
they priced it at.  This was seen as very attractive to investors ("why,
look at the potential for profit as long as the market grows following
the growth projections!") and potential buyers of the company.  

Personally, I'd have preferred if we had lowered the price, not taken as
much profit, and sold more units to create a larger customer base, which
would have in turn fueled more demand, which might have lead to greater
sales, and so on.

As it turned out, Sun bought Cobalt, the internet bubble burst, sales
dropped, growth projections dropped, Sun looked at the sales and growth
and said, "The appliance model doesn't look like it's going to pay off,
we should do something we know how to do."  And voila, here we are.

- Lyle