Business: Brad on Biz

Try open source for hardware

By: BRADLEY J. FIKES - Staff Writer

Consumer electronics companies constantly churn out digital cameras, music players and other technological wonders. But they're not nearly as creative in selling technology as they are in making it. They rely on the old standbys, such as selling the main product at a discount and jacking up the price on supplies, or relying on rebates to lower the price.

Printers are the most notorious example. They're practically given away, but the cartridges are huge profit-makers. Lexmark locks down its laser printers with software that rejects refilled or third-party cartridges, preventing competition from lowering prices. It's apparently illegal under the Digital Millennium Copyright Act to reverse-engineer the software to make compatible cartridges.

There's an alternative use of technology that will get market share for some smart company and lower prices for customers. It's to sell printers at a profit, while opening up the manufacture of cartridges to any company.

The printers would be built so that cartridges fit in a standard interface, operated by software that would be provided without restriction to all companies that wanted to make the cartridges. Companies would be free and even encouraged to come out with their own enhancements that could plug into the common printer interface. Since the printer maker wouldn't be selling the cartridges, there'd be no conflict of interest.

Customers would pay a lot more upfront for these printers, perhaps $400 or $500 instead of $50 or $100. But heavy users would quickly begin to save money. Competitive manufacture of cartridges would drive the price down, through the same competitive pressure that lowers the price of non-proprietary memory cards.

The printer would probably appeal to the "SoHo" market: those with small offices or home offices. They have heavier printing demands than most individuals, but don't have the economies of scale to get the deals large companies can negotiate.

None of the big printer makers would touch this idea, of course. They don't want to cannibalize their own sales. But some hungry technology company that wants to get into the market and has no sales to cannibalize might make it work.

The open source model has transformed the software industry. Let's see it applied more often in hardware.

Contact staff writer Bradley J. Fikes at bfikes@nctimes.com or (760) 739-6641.

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