Graham Daniel wrote:
[snip]
> In the mean time many of us are switching to Atmel, and in 2-4 years
> time I expect that we will be complaining about Atmel's pricing, which
> may suffer precisely the same increases as Atmel achieves a level of
> dominance.

...does anybody has any idea about what is the 8 bits mcu's market share
for Microchip, Atmel, Philips and Motorola?  You'd surprised.  Motorola
for example doesn't has a direct replacement for their mcu's in the
competition, the same for Atmel AVR... with a captive market not focused
on hobbyists, they have their prices down because they bet on large
quantities.  Recently at the "Electronic Buyer News" I saw a market
share for mcu's, I will not tell you "who was not even in the ranking"
because it would be from memory without magazine number and page for
confirmation.  I will try to find it out.

So, the word "dominance" here needs to be defined if it is related to a
specific captive market, or ruled by a real industrial large consume.

For example the Intel 80x86 mpu's. Every time a new processor is
released it cost the eyes of the face, months later you can buy it
almost by the same price of its predecessor, why?, just because the
"captive hungry market" is able and willing to pay "any price" to have
it.  The selling chain just want to make the maximum possible profit
ripping off exaggerated hungry customers, then later they exercise a
"more real" market price, so a lot more customers can have access to it.

Would you buy a 450 MHz pentium III for your kids right now? Not a
chance, right? You can say, "In one year the Pentium 660 MHz would be
available so I would buy the 450 that would be cheap".  I don't think
that the 660 would be the big responsible for the 450 prices drop.
There are always who would pay more, so lets sell first for them at high
prices, and then get it down slowly and keep selling, and so on, until
in one year the price is right... :) Prices go down naturally according
to the market saturation (except at the software industry, and Bill
Gates worked it out perfectly) because what? lack of competition?

Somehow this is natural, "front row seats cost more", but remember, it
shouldn't cost the same after 3 years of the same exhibition, because
everybody would be at another theater...

Wagner
http://www.ustr.net