Is Competition bad?

AsSiMiLaTeD

So I'm curious what you guys think about this - is competition a bad thing? There are two main sagas in the tech world that I've been following lately, and alot of the opinions that I've been reading on forums and in articles have me questioning what I thought was a very fundamental and sound concept - When companies compete with each other it's a good thing for consumers.

When two companies compete with each other in providing a similar service or product to consumers, doesn't this usually result in a better product and cheaper prices for the consumer? Isn't that the whole idea behind competition, and our economy in general?

Saga 1 - Intel vs AMD in the CPU market
Everyone knows that Intel has the leg up in the CPU market at the moment. They're producing the fastest chips out there, and really at the best price-performance ratios (though the latter is arguable). I can't even count how many opinions and threads I've seen lately with consumers just wishing that one company of the other would take over and end that war - this is mostly on the Intel side since they're winning at the moment, but I've seen it all over - people want a winner!

You know, it wasn't too long ago that AMD had the upper hand, and not too long before then that Intel was winning, and so on. This war has been going on for more than ten years at least. I've only seen two things come out of the war - better processors at cheaper prices. AMD and Intel are always trying to outdo each other and this has resulted in huge advances in CPU technology and prices staying at a reasonable level. Everything from the manufacturing process, to the die size, to power consumption to just overall speed has improved dramatically over the past few years.

Do you think think that if Intel had bought out AMD 8 years ago that we'd be seeing 3 GHz speeds on a 45mm core processor?? Not a chance in hell.

It's that constant competition between the two companies that put us where we are today.

Saga 2 - HD DVD vs Blu Ray (yeah, I'm going there)
The same thing above applies here as well. Look at all the advances in HDM technology and the prices you can find on media. Anyone still got a first run copy of The Fifth Element on Blu Ray - wow what a POS! I'm sure the same crappy releases existed on the HD DVD side as well originally. You've got improving profiles on Blu Ray giving you more functionality, TrueHD across the board, and you can get both types of media for about the same prices as standard DVD if you shop around now.

Where would we be at now if either HD DVD or Blu Ray had won the war two years ago? I'm sure we'd get it all worked out eventually, and in fact we're still working out all the kinds, but it's the prospect of your competitor beating you to the punch that drives the innovation that gets these things resolved and gets the prices down sooner rather than later.

Hell, look at the prices of the players, they've all been cut in thirds in less than a couple years. You think we'd be seeing $300 Blu Ray players if Sony had won 2 years ago? Sure they'd eventually make it into this price range, but not any time soon.

One could argue that DVD will still be a competitor with whichever format wins the war I suppose, and that prices on HD stuff will still remain low to try and compete with DVD. I don't fully buy that, but time will tell.

I 'get' that in the case of Blu Ray vs HD DVD the consumer is at a bit of a disadvantage because they have to buy two players. While that is an additional up front expense, I believe that factoring in only the cost of the players is a bit shortsighted, especially given that reasonable cost at which at least one of the players has been available for quite some time now.

If I have to spend an extra $200 up front, but a) I can recoup the costs in cheaper media over time, b) it results in a better technology overall, and c) that player can also do the job of regular DVD playback as good as anything else in it's price range - I'm okay with that.

Standardization:
Yes, I understand that standardization also has great benefits. it makes things less expensive to produce and easier to support. I can especially understand the argument of standardization in regards to the HD DVD vs Blu Ray issue. My only point here would be this. If we were truly comparing apples to apples and the only difference between the two was the actual physical media itself, then I'd definitely be in favor of standardization, but we're not there. The two are different technologies altogether, and there are still functional differences between the two. Yes, those functionality gaps are closing, but that's because the two technologies have been competing for the past two years - THAT"S MY WHOLE POINT!

Maybe the two technologies are close enough that standardization is possible, and maybe there's nothing further to be gained by continue competition. I don't know the answer to that - DO YOU?

Final Thoughts:
Maybe I'm not 'getting it', but I've always viewed competition amongst companies as ultimately advantageous for the consumers:

XBOX 360 vs PS3 vs Wii
Ford vs GM vs Toyota
Denon vs HK vs Onkyo
Nikon vs Canon

Take any of those groupings, and remove all but one option. Do you really think you'd have as good of a product and as low of a price?

Isn't there a law or something about monopoly?

My whole point isn't whether or not it's time for an end to the format war or time for Intel to take over. My point is that people seem to be really quick to want a universal standard for everything - even possibly at the expense of innovation, product advancement, or long term price stability.

I'm not an economist or an antitrust lawyer - that's just things the way I see them. I appear to be in the minority, so I'm open to your thoughts...

Ricardo

I didn't read the whole thread, but just by seeing the question, I'd say that generally speaking competition is good for the consumers.

danger boy

well with CPU's at least.. everyone in the free world has at least one if not more computers in their household... all offices around the world rely on computer's each and every day.. this is the computer chip world we live in now.

Even things like coffee makers have some kind of chip in em now.. 15 yrs ago, prob not. so you can't compare the saga of CPU's really to anything else. There are so many brands of computers out there.. that having two or more major chip makers can easily co exist together. Whereas for your HD movie viewing pleasure, maybe not.

CPU's run the world. entertainment competition for your dollar like Blu Ray and HD DVD do not run the world and are not required for you to use them everyday in the work enviroment.

that's my take on it..

AsSiMiLaTeD

I wasn't really trying to compare CPU to the HDM thing, just thinking of another example. You could take CPU war and replace it with XBOX vs Playstation vs Nintendo - same theory should apply.

Willow

Comp. it good as in the end you will have the best !

Shizelbs

Competition is a wonderful thing.

danger boy

I see your point.. but those other examples are still entertainment options.. but i get it though.

Competition is good for business. here where i live we have only one cable company. Comcast. Each time their contract comes up for renewal with the city.. they are awarded the contract, since there is no other cable company here.

It bites for cable subscribers, since for cable that's our only option. If another cable company was here, things of course would be different.

Currently I think you now have Nintendo back in the game, whereas they were not even considered a player any more for several years.. Sony and MS pretty much have dominated the gaming market for a number of years.. who would have known the Wii was going to capture the gaming world by storm really.

you think currently MS and Sony are working on a Wii clone? you bet your **** they are.

Ricardo

danger boy wrote: »

Competition is good for business.

Some might say this is true in the long term.....but the one that really benefits from competition is the consumer.

danger boy

Ricardo wrote: »

Some might say this is true in the long term.....but the one that really benefits from competition is the consumer.

Ricardo,

i do see your point. Sometimes only the strong survive. lean and mean is definately where the business world is today.

jdhdiggs

I really don't get why if blu ray (or HD-dvd) wins that competition is dead... There will still be manufacturers fighting for your money, you'll still have studio's fighting for your money. In reality, I think one or the other winning would bring more innovation and lower prices.

The CPU example is a bit flawed for this reason. If AMD dissapeared, you would have to buy an Intel chip. If HD-DVD dissapeared, you could still buy a player from Sony, panasonic, LG, etc... and buy media from Paramount, Warner, Universal, etc... Competition would still exist, just like it did with VHS and DVD.

danger boy

if the movie studios no longer support HD DVD.. where are you going to get movies to watch on it? yes some will still be around.. but try and find a Betamax movie right now.. nearly impossible. let alone a player to watch it on.

jdhdiggs

Watch on what? You HD-DVD player? Well, you'd buy a BR player and play it on that. You want something on Betamax? Why? It should be on DVD or VCD somewhere, if not you ought to be able to download it digitally. I don't understand your argument?

Ricardo

I think the point is that there would be no competition in the High Definition DVD arena; we would have Blue Ray, Blue Ray, and if you don't like any of these, you could get Blue Ray.

Of course you can always opt for staying in the Standard Definition side of things, but for those that want a better format, the lack of competition would probably drive prices higher than they would if there was more than one HD DVD option.

jflail2

While the players may be dropping in price b/c of competition, the media itself is still rather pricey (at least in my book, 25-30$ a disc seems a bit much.) The prices came out that way 2 years ago, and other than the occasional bogo deal or whatever, they are still floating around 25-30$. I would have expected a little larger drop in price considering they have been around a couple of years now...

Bamadude

What if there were five DVD formats that all required different players and no one studio ran more than one format. That would really blow. Too much competition can alienate consumers especially in a market where standards are needed so that folks don't feel threatened with obsolescence. Right now there is only one standard def DVD format and it worked out pretty well.

Don't get me wrong, I think competition is great in most cases. God only knows how much high speed internet would cost if comcast had a monopoly.

steveinaz

I don't think anyone will disagree that competition is a good thing. What chaps my **** is bringing out 2 incompatible widgets, and using the consumers dollars to do your market research for you, by waiting for a victor to emerge. Having said that, we do it to ourselves as consumers. Buyer beware, just because someone sells it, doesn't mean it'll be here tommorrow.

PhantomOG

There is a HUGE difference between two companies competing at making a standardized component and two companies fragmenting an existing standard.

The two are completely different issues. Fragmenting standards can be good or bad. But in alot of cases it ends up being bad for consumers.

Standard DVD players had TONS of competition. That's why you can find a $20 DVD player on sale at Wal-Mart. Having a standardized format was good for consumers because it meant buying media was free from being tied to a single manufacturer for a player. If you're tied to one manufacturer for a player, you WILL get screwed in the end since its virtually creating a monopoly. You buy the media and it will only work on their player, or players that are made by other companies who are forced to pay licensing fees. Either way you get screwed out of more money.

The game console market has always been one in which we have fragmented standards. Media is tied to the players. Its always been like that so no one seems to mind. Personally, I would hate to see the high def DVD format fragmented like the game console market. Especially after enjoying so many years of a standardized sd DVD format. I don't want multiple players, and whether you want to believe it or not, combo units cost more in the end because of having to pay for multiple licenses/technologies.

In the end, I believe it will be the movie studios that save us. We have had both Sony and Toshiba **** the consumer base by not being able to come to an agreement years and years ago. This caused hesitation on the part of consumers and movie studios, which only further delays adoption and reduced pricing from economies of scale. Slowly but surely movie studios have climbed aboard, each one carefully watching the moves of others. No one movie studio wants to be on the losing end. Thankfully we are finally seeing a shift to one side and I believe the movie studios will flee from the losing format like rats from a sinking ship. In the end, this will hasten adoption by consumers and also bring discounts sooner as more and more hardware manufacturers come on board to make players on a standardized format. No manufactuerer wants to spend the tons of money necessary to build a factory which produces obsolete players.

steveinaz

Yep, absolutely.

BIZILL

what i hate, and this will be a very general statement, is that NO, the consumer does NOT get to decide this war. it's the corporations' (both sides) money that makes the decisions.

PhantomOG

The microprocessor industry losing AMD as a competitor does absolutely nothing as far as "standardization". The only incompatible parts between the two companies are basically motherboards. Standards for components will always change/improve, but for the most part, components will work with either -- be it RAM, cases, video cards, hard drives, and most importantly MEDIA (software).

Wanting AMD out of the market is just plain stupid. It helps no one but Intel, since they will be free to increase their prices as much as they want and reduce their spending on R&D likewise.

PhantomOG

I understand people extending the common ideal that competition is good to the format war but it really isn't that simple.

Cell phone companies in the US is another example of how incompatible service hurts the consumer. Ask anyone from other countries where SIM cards are prevalent what they would think about our system where you buy a phone and its only good if you keep paying the people who you bought it from.

sophie

i agree with phantom and i think that if one of the company's has to go it should be intell. they have better processors now but that changes every year or less. and AMD normally gives you more bang for your buck.

Bamadude

Polkmaniac wrote: »

Maybe the two technologies are close enough that standardization is possible, and maybe there's nothing further to be gained by continue competition. I don't know the answer to that - DO YOU?

I do think the initial competition has done some good with new features, but at some point (preferably yesterday) a standard is needed for the benefit of mass adoption so that we can move on already.

BIZILL

BD live would have taken three years to ever see the light of day, if at all, without competition. hell, even 1.1 wouldn't have come so quickly to blu-ray minus comp.

McLoki

Yes, competition is a great thing for the consumer.

I do not consider HD-DVD vs Blue-Ray competition though, (in the reference you are making it) it is more competing standards.

IE - do you consider standard definition DVD a monopoly? Do you have only one manufacturer, studio, or film to choose from? Why do you think it will be any different with Blue Ray or HD-DVD when everything shakes out and there is on high def standard?

I would say that the current competition for standards has decreased competition by keeping smaller vendors out of the fray. (see high def oppo thread for an example) There are many companies that have the capability to provide players and other extras than cannot afford to "gear up" for production for a format that may be dead in a year. Due to that, only large companies with deep pockets have the ability to play right now. As soon as a standard is chosen, that will change and you will see the market flood with players and other options from many different sources. (Not just players, but DVR's with long record or high def recorders built in, Computer Drives, blank media, low cost high def players with chips custom built for common features, I think high def movies will also drop in price to where Standard def is now and standard def will drop even further. ($7-$10 new release and standard price of $15 for standard def, about $5 more than that for high def)

Competition is great, I can't wait till we have it in the high def war.....

janmike

Competition is a good thing. It keeps people honest and I hate monopolies.