[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.