Tuesday, September 27, 2005

Unit cost

I think I have unrealistic expectations for consumer electronics. Despite the commoditization that occurs, I still expect products to fall to what can best be described as a tenth of their original price within a year or so. Case in point, I think a portable DVD player with a 7" screen should be sub-$100. Not just the occasional blue-light special sold out of some guy's trunk, but all the makes and models. Also, a 4 or 5 gigabyte MP3 player should be in that same price range too. The funny thing is that even if they were, I still wouldn't buy them. I just think they should be cheaper.

Actually, I would consider purchasing one or both of those items if I did substantially more traveling (read: flying), more so than I have in the last year. In fact, since summer of last year, I have taken at least 26 flights in eight distinctly different trips. There's something very entertaining about flying. I like the whole single serving-ness of everything, though I would like to know when that serving stopped including some sort of pretzel or nut-based snack on America West.

Speaking of cost, when I think about work, I am surprised by how cheaply we can do what it is we do. Due to the general upswing in oilfield service work there has been an increase in the prices service companies can charge for their services. This is nothing new and our CEO mentions it in this article. (I really only include the article to demonstrate that this pricing power we have is a matter of reasonably common knowledge and thus it's no great internal company secret. Frankly the article isn't especially suitable, but it suffices and I don't care to find a more suitable one with more suitable quotes.) Anyway, despite any increase in prices, when you consider what goes on to perform something as mundane sounding as a cement job, it seems like a steal. There's equipment like a high pressure pump, treating iron, cement head, cement transports, data acquisition dealies and materials like the cement itself and also manpower. A fair bit has to go into even the smallest job, but it still doesn't seem like much money that we charge. Oh, it's enough money that we charge, but I find it interesting to see how it's all been set-up to do the work at such a low incremental cost.

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