Sunday, May 31, 2015

Memory and Voice Costs Declined 3 Orders of Magnitude Since 1993?

The retail cost of memory, like the retail cost of texting, calling or messaging, is a fundamental reality for nearly any business or industry where product creation distribution and consumption has significant "information" content. 

The price of a product (a gigabyte of storage) falls from $9,327 to $2.48, a decline of three orders of magnitude over two decades. 

Nothing that dramatic has occurred for most carrier-provided voice calls. From 1965 to 1985, for example, U.S. originated international call prices dropped by about half, or about one order of magnitude ($10 for a three-minute call to $5 for a three-minute call). 

Between 1993 and 2013, the cost of a mobile-initiated voice call in the U.S. market dropped about one order of magnitude. 

Of course, it is hard to compare carrier voice with the cost of Skype-to-Skype calls or instant messaging services, which might have "zero incremental cost." 

But it would not be hard to attribute a three ordes of magnitude effective price decline, if one used an attributed cost model, where some percentage of the cost of Internet access was used as the indicator of incremental cost of usage. 


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