comment by Dmytry ·
2012-03-11T18:19:20.211Z · LW(p) · GW(p)
I can't. And as already pointed out, costs for large tech companies or datacenters are already dominated by such apparently trivial factors as energy costs - a 10x increase in raw processor price would be catastrophic.
I'm not sure this would apply if the 10x increase in price applies to everyone else as well. We wouldn't pay Google real money if there's Bing for free, but we would have to if there's no competition. edit: also for the energy cost, a: it's by no means trivial and b: only goes to show that if the CPUs get 10x more expensive it won't be such a huge rise in final operational costs.
You will notice that the processor companies are only able to engage in price discrimination up to around $1000 a processor or so. (The most expensive Intel processor I could find at Newegg was $1050.) This suggests you are wrong.
Competition from the lower-range products.
edit: actually, I want to somewhat clarify paying 10x of what I am paying. I would probably upgrade home hardware less often, especially at first (but factor of 10 is only 5 years of Moore's law or so). The hardware for business is another matter entirely. It is not at all expensive to pay Google >>10x of what it makes off you via showing you ads. The ads are amazingly bad at generating income. They still provide quite enough for Google.
I pay ~20$/month for 100 megabits/second up and down (Lithuania, the world #1 internet speed). From what I know (my girlfriend is from US) typical costs in US are 50$ for perhaps 10 megabits on a typical day; god knows how much equally reliable 100megabit costs there. And this ain't hardware costs, because hardware is not any cheaper here than in US. It's probably the labour costs.
My brother lives in Russia. They make way less money here; they still buy computers; if the computers were to cost 10x more, they wouldn't be able to afford it; but people in the developed countries would merely be having to save the money some.
And with regards to purely-luxury spendings, if diamond prices become 10x larger, the people will be spending about same on diamonds and buying 1/10 the diamonds, while the diamond industry will have about same income (actually i could expect income of diamond industry to rise because more expensive diamonds are then possible in the rings without mechanical considerations). The diamonds in jewellery are inherently only worth as much as you pay for them. Now apply this to the chips. Picture semiconductor industry that, in total, makes same as it makes today (or more due to non-elasticity of consumption), while having to produce only 1/10 of the chip surface area. That goes for the luxury market. The non-luxury market can't cut down the consumption as much, and when price rise affects everyone else just as well, can pass the costs on consumer (see paid Google example)