Commoditization as competitive strategy
Nicholas G. Carr writes: The way big IT companies are acting in the marketplace is actually accelerating the commoditization of their products and services. Commoditization lies at the very heart of their competitive strategies. Look at Intel. According to The Wall Street Journal, Intel is selling its Centrino Wi-Fi chips for its cost to fabricate them. Why? For one thing, turning Wi-Fi technology into a cheap commodity is a good way to crush would-be competitors. More important, making Wi-Fi chips broadly affordable encourages people to buy laptops, and selling laptop chipsets is far more lucrative for Intel than selling desktop chipsets. It's in Intel's interest to commoditize Wi-Fi as quickly as possible. Other companies are finding that commoditization is a great weapon to use against an archenemy. Sun Microsystems, for instance, is heavily promoting StarOffice, its inexpensive open source alternative to the ubiquitous Microsoft Office. Sun knows that if it can commoditize basic business apps, it can begin to break Redmond's stranglehold on the PC desktop. On a larger scale, IBM is also attacking Microsoft by spending billions to promote the adoption of Linux, rather than Windows, for PCs and servers. from Wired 12.05: VIEW.
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