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Ask HN: What are the signs a piece of technology will become commoditized?

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Re: Ask HN: What are the signs a piece of technology will become commoditized?

#41

I'd think that the biggest sign (though arguably a sign that a technology has already become commoditized) is when you see a leading vendor explicitly announcing/advertising a price cut. At that point, the story they're telling is concretely shifting away from the narrative of "our technology is uniquely suited to your needs" and toward "we can give you more widgets per dollar than the other guy". Example: GoPro. The…

Absolutely. And once the leading vendor cuts the price, it becomes a race to the bottom.

Re: Ask HN: What are the signs a piece of technology will become commoditized?

#42
It's easier to answer in reverse: businesses escape fierce competition (the normal state in a competitive marketplace) if they have -

1)Trade secrets, such as aluminum casting (if I recall correctly) for Musk and SpaceX, and Intel's tempering of memory chips in the early days.

2)Patents - when others can reverse engineer what you've done, you don't have the option of 1). Copyrights, somewhat similar and can be a part of tech products in the US (code, etc.)

3)Network effect/high cost of entry. (Most likely when monopoly and competition laws are poorly enforced, as is often true in new fields.) But disruption is a possibility.

4)Law/corruption. More common than thought. The EU thinks the US is simply ignoring antitrust laws re its large companies such as Google (anything free can count as bundling), for example. Interoperability isn't even on Facebook's radar. This can take a fairly soft form EU laws forbid wines from outside a given region being called by the famous name (such as "Champagne") and may soon forbid overseas data storage or passage too. Security laws in China, re tech products, will likely restrict foreign competition there in the long run. Amazon is being allowed to in effect enforce ebook prices of at least $3 with no action from the justice department, leveraging that policy to gain exclusive access to large numbers of books (if they want any free days.) Strictly illegal, but it's just not in the US interest to go after their own Hegemonic corporations. So ebook distribution, the most obvious of commodity services... turns out not to be a commodity at all, somehow given Justice department inaction.

There are other temporary causes, such as a shortage of workers with particular knowledge or skills (coders just now.) Well, here's hoping that's temporary.

Refusing to participate in a race to the bottom (in quality say, and taking a hit for a while) can also leave a company without obvious competition for a time.

I've left out cornered markets on minerals, not too likely at the moment.

One could also add patent pooling, which US automotive companies used both to save on research and raise the cost of entry, in the short run in order to create an oligopoly.

Re: Ask HN: What are the signs a piece of technology will become commoditized?

#43
If the new technology can help an emerging industry/market to make things cheaper, easier, or with higher performance then the technology will become commoditized to be adopted in large scale. The time it takes to be commodotized depends on competition, and stage of industry life cycle.

Re: Ask HN: What are the signs a piece of technology will become commoditized?

#44
post #17

In its early stages, every technology is vertically integrated, aka tightly coupled. If you were to buy a minicomputer or mainframe in the 1970s, or a personal computer in the early-1980s, the same provider would make the hardware, peripherals, OS, applications, etc. As the technology develops, that changes -- the PC market in the 1990s turned the hardware, peripherals into commodities. Until Apple's resurgence, it l…

I think HP was seriously hurt by this, losing to Intel in R&D right?

Re: Ask HN: What are the signs a piece of technology will become commoditized?

#45

It's easier to answer in reverse: businesses escape fierce competition (the normal state in a competitive marketplace) if they have - 1)Trade secrets, such as aluminum casting (if I recall correctly) for Musk and SpaceX, and Intel's tempering of memory chips in the early days. 2)Patents - when others can reverse engineer what you've done, you don't have the option of 1). Copyrights, somewhat similar and can be a part…

Peter Thiel also has a good description of how to differentiate (avoid competition), through either: 1. Proprietary technology 2. Network effects 3. Economies of scale 4. Branding You can read the relevant chapters from the book 'Zero to One' on genius.com: http://genius.com/Chapter-3-5-of-zero-to-one-peter-thiel-ann...

Re: Ask HN: What are the signs a piece of technology will become commoditized?

#46
post #26

Mobile Device Management (MDM). Blackberry got the ball rolling in the early 2000's, but it was the release of iPhone and Android that got vendors rich. Apple and Google created API's and enrollment processes to manage devices (device lock, wipe, etc.). Companies created software to consume those API's, the biggest being AirWatch, Mobile Iron, and MaaS360. AirWatch was acquired by VMware for $1.5billion in 2014 and M…

I had to Google MAM to clarify what it meant, and then I realized this was what I was wondering about the other day, puzzling over how BYOD isn't a massive security nightmare.

I must admit, I'm very fascinated with application management would actually be executed, from an academic / computer science angle.

I can also completely understand patenting from a business perspective, but I'm also curious as to what things have actually been (publicly) patented.

How is MAM different from MDM?

Re: Ask HN: What are the signs a piece of technology will become commoditized?

#48
On the supply side: No patents, or easy/cheap to license patents. Technical trade secrets don't remain so for very long. Large margins for one or a few suppliers/manufacturers.

This is basically what is happening with the smartphone business. First Apple started it. Then there were a few players like LG, Samsung, HTC, etc. Now everything and their uncle is starting a smartphone company. Companies like Lenovo, video con, not to mention the Asian upstarts from China and India which are definitely late entrants to the market.

On the demand side: Steadily increasing users: Early adopters not abandoning the product, but continuing to use it. Increasing numbers of early adopters in various social circles.

Re: Ask HN: What are the signs a piece of technology will become commoditized?

#49
When you see people telling in public about talent sortage in the XXXXX field/sector/technology - you can bet this is about to be commoditized.

Why? because the ones that send that message need/want as much cheap labor on that field as possible, and that's the way they can get a lot of people moving on that field.

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