Low cost isn’t everything
Benjamin Shobert, the managing director of Teleos Inc has just released an article “Low cost isn’t everything”. He pointed out that many Chinese companies do not spend time on investigating how to penetrate into the export markets. Instead, they spend all the time on lowering the costs. He said those companies have to wake up and have a balance on lowering the costs and providing the necessary features to the foreign users.
Benjamin has pointed out the weakness of many of the Chinese manufacturers nowadays. About a few years ago, when I went to China to purchase different kinds of consumer electronics and computer products, I had met a few manufacturer owners. I asked one of them why they would still produce the USB 1.1 thumb drive while the USB 2.0 was so prevalent. His answer made me terrifying. He said the production cost of making it USB 2.0 was just RMB $3.0 (About USD $0.4) more expensive than the USB 1.1. The reason of doing that was because he thought that mere price difference would make his products more competitive. Actually the inverse was true!
