Re: USR Lowers Pricing

John G. Thompson (jgt10@livingston.com)
Fri, 04 Apr 1997 07:13:01 -0800

At 09:45 PM 4/3/97 -0600, Jonah Yokubaitis wrote:
>On Thu, 3 Apr 1997, Sherwood Pekelo wrote:
>|Is this under cutting of prices considered Unfair trade? What is the cost
>|to USR for manufacturing a TC? I've heard that Livingston runs on a tight
>|margin to ISPs, but still they have a positive markup...unless USR was
>|seriously gouging on their pricing ( heh, whatever the market would bear I
>|guess)
>
>Bullshit. R&D is the biggest cost in the TC/PM3/MAX. The PM3 is a
>486/66 with some very nice software in it :-) The DSP modem cards I
>doubt cost more than $15-25/modem. The entire chassis costs livingston
>< $1000 to build I would bet.

If you did make that bet, you'd lose.

What you say of the PM3 is true of the PM-11, it was a fairly standard PC
motherboard and expansion cards and custom software.

All products since then have been fully designed from scratch. Open up a
PM3 and look at the backplanes. I don't think you will find them in any
PC. You could also take the CPU part number and look it up in a parts
catalog, you might find out some interesting aspects about the chip.

>Now, having an ENTIRE company to have to
>back it plus all the R&D costs + ongoing R&D costs + + + +.
>
...
>Livingston is a software company that loads their software onto fairly
>off the shelf hardware.

BZZZZT. Thank you for playing. Please come back and play again sometime.

>This of course is a simplified explanation, but the analogy still
>stands.

The analog is incorrect, period.

>I rather like the fact that livingston uses off the shelf
>parts (like $10 486/66 cpus etc) because it will allow them better
>profit for more R&D for BETTER products that beat those heat burner
>piece of crap Ascend/cisco boxes.

Now that much is much closer to the truth. If you think about it, another
reason is the tight focus and resistance to 'freeping creaturism'.

>now, a 10 PRI box with full duplex 100baseT would be quite nice :-)

That WOULD be nice.

JGT
IP petro primate

--
John G. Thompson       Livingston Enterprises Inc.    Phone: (800) 458-9966
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