Monday, August 15, 2011

Justifying the higher price of a Sony VAIO VPCYB25AG/B compared to a HP Mini netbook

When some weeks back I had to choose a small, light, ultra-portable notebook for my father [primarily for accessing the Web], I faced a dilemma - whether to go with the cheaper HP Mini [or equivalent alternatives from Dell, et al.], or to go with the relatively expensive Sony VAIO VPCYB25AG/B.

I decided to compare to differences between the Mini and the VAIO and assign individual costs to these differences, in order to determine if the VAIO justified its higher price [INR ~25K, compared to INR ~17.5K for the HP Mini 210-2103tu PC].


The VAIO has the following extra stuff compared to the Mini, and I've assigned an approximate price to each of the extra things. It has to be remembered that the extra stuff will be enjoyed over the many years one is expected to use the product, so the actual value realized might be significantly more than my conservative estimates.
  1. CPU: The CPUs can be considered broadly equivalent. However, judging by some online reviews, the AMD chip in the VAIO beats the Mini's Intel chip in standard CPU benchmark tests by a material margin. INR 1,500 value.
  2. RAM: The VAIO has double the amount of RAM than the Mini has, although its memory is slightly slower than the Mini's. INR 1,000 value.
  3. Display: VAIO has a 11.6 inches display, compared to 10.1 inches on the Mini. My hands-on experience made me realize that a while a 10.6 inch display fares poorly from a readability perspective [defeating the purpose of buying a machine for Web access], a 11.6 inch display passes the minimum acceptability barrier by a decent margin. INR 2,000 value.
  4. GPU: With its AMD Radeon GPU, the VAIO easily beats the Mini when it comes to graphics performance [increasingly important in more and more products, such as in Internet Explorer 9]. INR 1,500 value.
  5. HDMI port: The port is absent in the Mini, but available on the VAIO. INR 500 value.
  6. Software: The VAIO has a better bundled software package. INR 500 value.
  7. Design: The VAIO has a far more elegant and tasteful design than the Mini, one that's both more functional and more pleasing. INR 1,000 value.
  8. The "Sony" and "VAIO" flaunt value: One must assign a price to the extra flaunt value that comes from carrying a Sony VAIO. Acer, Compaq, Dell, HP, Lenovo, etc., just can't beat the Sony and VAIO brands. INR 500 value.
  9. Build quality: A minute spent with both the Mini and the VAIO makes it clear that the Mini doesn't match the build quality, finish, manliness, ruggedness and workmanship of the VAIO. The VAIO gives the feeling of a machine that has been designed and built from scratch, with care and love, while the Mini gives the feeling of an assembled machine, a toy. INR 1,000 value.
I concluded that the extra differential value offered by the VAIO is about INR 9,500, which more than compensates for the INR ~7.5K difference between the actual market prices of the products. Even if the extra value is not taken into account, essential attributes such as display size, design, and build quality made the VAIO the more sensible choice.

Sunday, August 07, 2011

Hidden, ugly truth: It's the petrol buyers in India who are subsidizing the price of diesel!

I'm strongly against sale of diesel cars in India. Diesel has been subsidized in India for agricultural use and for use in trucks, etc., and not for use by wealthy owners of Audi, BMW, VW and other cars.

In India, we're repeatedly told that the government subsidizes diesel (and kerosene, etc.) for welfare reasons. Yet we see the super-wealthy segment misusing this subsidy by buying diesel versions of cars (next time carefully look at every Mercedes and Skoda that passes by, you'll notice that a majority of them are diesel-powered).

The ugly truth Indians are not told is that diesel is not subsidized by the Indian government.

It's subsidized by the petrol buyers!

It's the petrol earnings that subsidize the price of diesel. And who pays for petrol? Those with bikes, scooters, Maruti 800s and the scores of other petrol-powered vehicles. While someone driving a Toyota Corolla can easily afford petrol, someone driving an 800 or an Alto or a Nano probably finds it difficult to buy the ever-more-expensive petrol. And yet, this individual finds himself in the uncomfortable and unacceptable situation of subsidizing the fuel costs of a BMW owner, who clearly has enough money to pay for petrol.

Automobile companies in India are clearly trying to profit from the rate difference between petrol and diesel.

Solution: I believe that taking all of the following steps will play a significant cumulative role in ensuring that car-owners cannot and do not misuse the subsidy on diesel available in India:
  1. Ban the introduction of new diesel cars (let existing ones sell - read more below).
  2. Allow car companies who have already invested in diesel cars to continue selling these for the next 5 years. This will ensure that these companies are not at a disadvantage, after having already invested.
  3. Make it mandatory for all fuel stations to sell diesel to cars at a higher price compared to the price charged to tractors, trucks, etc. While there are some obvious holes in this step, it'll help at least partially.
  4. Increase the costs of owning and operating diesel cars (by increasing insurance costs, pollution certificate fee, taxes, etc.). This will recoup the subsidy that diesel car owners have misused over the years.