[rfrey]

These are all benefits for John Deere. I don't think anybody thinks there is no incentive for JD to do this.

Reduced manufacturing expense - Yup, DRM and platform lock-down (machinery is a platform??) increases profits. Tractors sure aren't getting cheaper on account of these "improvements".

"Platform flexibility" is nothing more than the ability for JD to lock out capabilities of the machinery that the farmer supposedly bought, and sell it as an add-on later. Again, no doubt this is advantageous for JD, just as locking out portions of a game until later payment is advantageous for EA. It is still terrible for the farmer.

[bricej13]

> These are all benefits for John Deere.

Yep, that was my point in posting. It's usually good to hear both sides of things.

> Yup, DRM and platform lock-down (machinery is a platform??) increases profits

Reducing manufacturing costs is not the same as increasing profits. They're not a monopoly, they still have to set prices according to the market. This allows them to price things lower.

> "Platform flexibility" is nothing more than the ability for JD to lock out capabilities of the machinery that the farmer supposedly bought, and sell it as an add-on later.

Do you think that when a farmer spends 100k they don't know what they're buying? I don't know what you mean when you say they 'supposedly' bought it. They order a tractor, customize it, and buy it. It allowes them to get a tractor at a lower price point and upgrade as needed

[toufka]

The market is small. And that means, pragmatically, a professional farmer in search of a combine might be caught between a couple of bad choices - but that doesn't mean they endorse the business practices.

[jwalgenbach]

The cost to JD to manufacture the tractor with lower horsepower limited by the software lockout is the same as it is to manufacture the tractor without the software governor. That's why it looks like a scam -- JD doesn't spend a dime to deliver the upgrade. They get paid for removing the artificial limits on the product.

No one is saying that different hardware (or even software) features of the tractor shouldn't be configurable and charged accordingly, but the lock-out is different. JD is crippling the capabilities.

[vageli]

> The cost to JD to manufacture the tractor with lower horsepower limited by the software lockout is the same as it is to manufacture the tractor without the software governor. That's why it looks like a scam -- JD doesn't spend a dime to deliver the upgrade. They get paid for removing the artificial limits on the product.

> No one is saying that different hardware (or even software) features of the tractor shouldn't be configurable and charged accordingly, but the lock-out is different. JD is crippling the capabilities.

This is exactly how modern chip fabrication works for computer processors. The crippling of the product at one end of the product price point spectrum allows the manufacturer to sell the device at a lower price point which ultimately benefits consumers who wouldn't be able to enter the marketplace at the otherwise higher price point. I'm not defending the practice outright but it's not such an outright scam as one might conclude upon first glance.

[wahern]

Whether DRM-based price discrimination "allows the manufacturer to sell the device at a lower price point" or allows the manufacturer to sell the device at a premium price point is the heart of the dispute. You can't know whether it's one or the other without modeling whether the contrapositive holds (i.e. if DRM then lower prices -> if not DRM then not lower prices), and doing that is extremely difficult.

In general, though, I'd argue that historically such price discrimination (i.e. via contracts, copyright, etc) has usually served to inflate prices. You usually only find such price discrimination in non-competitive markets.

In any event, anyone who says that it leads to lower prices is at best misleading. It can theoretically. In a competitive market the question is irrelevant because if it led to higher prices people would change suppliers. The question really only matters in situations where the market isn't particularly competitive.

[askafriend]

> Whether DRM-based price discrimination "allows the manufacturer to sell the device at a lower price point" or allows the manufacturer to sell the device at a premium price point is the heart of the dispute. You can't know whether it's one or the other without modeling whether the contrapositive hold

You're making this more complicated than it has to be. You can easily know this by just looking at the capabilities that other tractor manufacturers are offering at the same price.

Like he said, there's no monopoly in the tractor business. And it's not like someone is buying a fake Gucci bag by accident. These are $100,000+ purchases with a lot of back and forth. You know what you're getting into and you've presumably shopped around to look at a ton of alternatives.

[wahern]

There doesn't have to be a monopoly--competitiveness isn't binary. Intel doesn't have a monopoly in x86, and yet Intel uses firmware to cripple their chips (e.g. certain instruction sets disabled on low-end SKUs) while AMD doesn't. But does anybody really think that the x86 market is as competitive as, say, shampoo; or that Intel's price and product discrimination is resulting in lower prices at the low-end than would otherwise happen?

Maybe, but it's not immediately clear. And in any event it would be foolish to take Intel at their word that their strategy results in lower prices and/or better products, regardless of their sincerity.

And FWIW I'm not claiming that John Deere should be prohibited from doing what they're doing technologically, not unless it rises to an anti-trust violation. However, I do oppose the abuse and extension of copyright to prevent reverse engineering and prevent owners from modifying their machines. Even if John Deere's strategy is resulting in lower prices at the low-end, I'm not prepared to sacrifice the ability more generally (in this and other markets) for reverse-engineering competitors to sell their own firmware. There are many other reasons beyond the threat of copyright lawsuits why customers wouldn't want to run a machine with adulterated firmware, so even if a robust reverse engineering market resulted in higher prices for these particular tractors, it'll likely only be marginally so. I don't think it's worth cutting-off potential competition at the knees for whatever gain John Deere is claiming. History has shown that such policies, writ large, are extremely detrimental.

[jwalgenbach]

Yeah -- it's the same thing, and I'd argue it's a scam. Companies are not losing money on the lower horsepower tractors or lower speed CPUs. So they are manufacturing a single product and artificially limiting it so it can be sold at a higher market value to remove the limits.

It'd be easier to argue that writing the code and building the governor capabilities into the product in the first place inflate the price of the product to begin with (because adding and supporting "features" require both initial investment and maintenance), and then using the product to it's actual limit is artificially inflated, because they can.

[bricej13]

> JD doesn't spend a dime to deliver the upgrade

That's true, they already spent all the dimes installing the top-of-the line engine in the tractor.

> JD is crippling the capabilities.

Said another way: Deere gives a discount to those who don't need the full capabilities of the engine provided. Another user pointed out that market price is $1000 per horsepower. That's a significant savings when you don't need the extra 1-300hp.

The idea of buying 'Horsepower' instead of an engine is pretty weird though.

[zaphar]

This is all sort of an argument about semantics. But the real heart of this argument is over who owns the tractor and whether it's acceptable for someone to limit what you can do with something they sell you.

Which is a "separate" question from whether the Government can limit what you can do with something you own. It's further clouded by the fact that you sign a contract when you buy it so you explicitely gave up some of your rights.

[jwalgenbach]

Correct, and they aren't losing money when they sell to consumers that don't need to full capabilities. Yet the tractor itself is already capable (and purchased -- or at least financed which amounts to legal ownership going to the consumer). They recoup their initial dimes in the base cost of the unit.

So JD, which isn't losing money on the "entry level" product provides no actual goods or service for the upgrade, beyond removing the governor. At that point, it's more or less free money to JD -- profit with nothing provided the consumer.

[tzs]

It does have some advantage for the farmer, assuming tractors have a long life and their used resale value is much lower than their cost.

Suppose they offered, say, 3 models of tractor that were identical except that they had physically different engines. The base model is $100k, the middle model is $110k and 50 more horsepower, and the top model is $120k and 100 more horsepower than the base model.

If a farmer buys the $100k model, and later decides that he needs 100 more horsepower, he's going to have to sell the $100k model and buy the $120k model. He won't get anywhere near $100k for the old one, so the next cost of upgrading is going to be a lot more than the $20k difference between the new prices of the two models.

Now consider if all three models had identical engines, with the horsepower on the $100k and $110k models limited by software in the ECU. Now if our farmer buys the $100k model and decides later than he needs 100 more horsepower, he just has to pay $20k [1].

What's the lifetime of these things? If it is long, the ability to buy just the capacity you need now and upgrade years later as your needs grow by just paying the difference between the cost you the model you bought and the model you now need could be very attractive.

[1] Well, probably a little more, as I would assume that they would price things so that it is a little cheaper to buy a more expensive model up front rather than buy a cheaper model and upgrade later.