May 13, 2013

YOUR NEXT CAR WILL BE A VOLT:

In defense of Tesla's price tag (Michael Levi, 5/13/13, Forbes)

Take the cellular telephone. The Motorola DynaTAC 8000X, released in 1982, sold for $3,995 (equivalent to nearly $10,000 today). Gordon Gecko, who carried one of the behemoths around in the 1987 movie Wall Street, typified the cell phone user: rich, arrogant, brash. As late as 1998, the Nokia 6160 (the most popular cell phone model of the 1990s) sold for $900, well beyond the reach of most consumers. It was not until the 2000s that cell phones, which improved dramatically while they were considered a luxury good, became cheap enough for mass adoption.

During the 20 or so years that it took the cell phone to move from high-end product to mass market, the phones themselves transformed too. The DynaTAC was more than a foot long, weighed over two pounds, and had a one-hour battery life; today, you can buy a two-ounce phone that's smaller than your palm for $20.

The automobile itself benefited from early adoption by wealthy buyers. The first successful gasoline-based internal combustion engine was introduced in Germany in 1885 and over the next two decades, engines and other parts of the vehicle steadily improved. Yet it wasn't until Henry Ford introduced his Model T in 1908 that modern automobile became accessible to mere mortals. Ford (F) introduced a host of innovations -- most notably the assembly line -- that made the Model T accessible to the masses. But he was only able to do that because he could build on innovations that had been driven by smaller, upscale markets for more than 20 years.
Posted by at May 13, 2013 2:39 PM
  
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