In those cases those parts didn’t pass testing so they would physically block off those parts. It really does make sense.
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They’re selling you a lie.
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It does(or at least purports to) allow you to charge a price that more closely approaches each buyer’s willingness to pay, which means that more of the surplus value of the transaction ends up with the seller than the buyer. That is why it allows you to offer lower priced tiers as well: because it ensures that the people who would be willing to purchase at the higher price still do so; rather than going with the lower price and pocketing the savings. The closer to perfection your price discrimination mechanism, the closer each buyer’s price is to their maximum willingness to pay; which determines how the difference between the minimum price at which you are willing to sell and the maximum price at which they are willing to buy(the ‘surplus value’ of the transaction) is divided.
As for the the OSS thing: the trouble with firmware locks isn’t so much that they provide an incentive against OSS(though it is certainly harder to imagine price discrimination based on firmware crippling working when all you have to do is compile with the “–disable-suck” flag and carry on); but that they require maintaining control of whatever the crippled feature is; which tends to involve hostility(legal, cryptographic, or both), even to modifications and independent reimplementations. The trouble with, say, Lexmark’s Toner Loader Program was not that this priceless jewel of software wasn’t OSS, that was of basically no interest to anybody; but the fact that, since it was an important part of the mechanism for enforcing restrictions on 3rd party cartridges, they were inspired to spend years litigating against anyone who dared interoperate.
In this case, nobody who is paying the slightest attention expects to get OSS firmware out of Tesla; but it seems pretty likely to expect that the system will be more hostile, technically and legally, if there is a bit that costs $5,000 to flip than if there isn’t.
Its called binning. Essentially its prohibitively expensive to develop a die and tooling for each processor in a product line. The dies themselves are expensive enough to produce that tossing flawed ones would be an expensive source of waste. So what happens is the chips are checked for flaws, tested for performance capacity. The fastest chips from perfect or low flaw dies become the top end of the product stack. Slower chips getting bracketed into the cheaper skus. And flaws like dead cores and such likewise become different products. So your 4 core and 2 core processor are likely the exact same chip design. But the two core had two likely broken cores removed/deactivated.
These days its uncommon to be able to re-activate disabled features. As they’re typically physically lasered off the chip, because it simpler than using software to disappear them. And it prevents broken bits from effecting how the chip runs. But in the past there have been situations where there weren’t enough flawed or low binning chips to meet demand or there were too many good chips that weren’t moving. So better chips had cores, clock speed, or other features deactivated by software. In those rare cases you could overclock or unlock that stuff. I remember AMD famously had a processor where you could pretty easily unlock at least one (if not two) extra cores, and do a very simple over clock. And boom you had the much more expensive processor.
Its a bit different than what Intel seems to do routinely these days. They’ll actually remove or lock out features that a chip is completely capable of. Or with hold fairly standard or cheap to impliment features from a particular product line. For the sake of bolstering the very, very high prices on their top line products. It allows them to differentiate new releases and top of the line processors when there is in fact very little difference between the news stuff and the old stuff. Or the i7 and i5. Even in terms of practical performance.
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When Elon Musk finishes boring his tunnel to Mars first class tickets will come with normal respirators second class tickets will have a reduction gromit.
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Go look at the car configurators. All the info is there. Look at the driver assistance functions. Many can be enabled in software because the hardware comes built into the platform.
As for engines, it is widely known that the difference between many VAG engines as they are sold is the level of tuning done on the vehicle. If you don’t know that you must be a software person who doesn’t know much about engines.
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I strongly suspect that they’re also physically destroyed in order to prevent exactly the scenario of “how dare you charge different amounts for the same thing.”
After all, with software, you can offer to re-enable the feature for a price, which is simply an extra option that enhances welfare (much like I will upgrade to the “Pro” version of software by buying a new license code). With hardware destruction, I have to rebuy the whole thing.
I’m still of the mind that “they’re making us pay for nothing!” is a moral instinct that actually harms customer welfare.
That would be the social welfare (as oppose to moral instinct) counter-argument to mine. (That is the argument that I’d make against my position.) If Cory’s post had been concentrating on that rather than heavily pushing the “they’re making us pay for nothing!” angle, I’d have stayed silent.
Still, I think that far more people take advantage of goods and services that have been enabled by the existence of DMCA than have been harmed, so in balance I think it’s probably a workable compromise. Despite hating high priced cartridges, I’d rather have them than minimum $500 printers.
Best factual reply evah!
In another context I could buy it. And Intel has absolutely done exactly that. There was some such with their servers where you had to buy a very expensive key to unlock basic things like the ability to install more drives, or increased ram speed or something.
But with the processors you can actually see the binning in the product themselves. Lower binned chips often don’t over clock as well as the higher binned ones. Which lead to the practice of bifurcating the product into "locked’ and “unlocked” chips at a different price. Better binned chips were sold as overclockable, lower binned ones that couldn’t handle it had that feature removed. Something Intel still does (largely so they can over charge at this point) and AMD has abandoned.
I don’t remember which AMD processors specifically could have their cores reactivated. But I had one. And it was only the very early chips, before the manufacturing had built up stocks of flawed dies, where it was practical to do so. The way you found out if you had one of those chips was by trying it out. Typically if you had bad cores you couldn’t get them going, but occasionally you could get a bad core active. I was able to get one of the missing cores working on mine. But it was not a good core. Reactivating it caused the processor to run really, really, unstable. Though the PC was bootable. And if I’m remembering my stock clock speed took a serious hit. I also tried over clocking for the first time on that chip, it wasn’t well suited to it. Similar situations often revealed problems like that. And there are still some things in GPUs you can reactivate like that. Where the feature or capacity was deactivated because it was broken. You get heat, performance, or stability issues. And I seem to remember some people actually frying their chips. Which seems to be why lasering shit off became common. And it doesn’t make much sense to laser off the bad chips that are getting binned, but software lock out the good chips that are getting dropped a level. Unless you want to go with the whole higher priced unlocked approach like with overclocking. ETA: Which would defeat the purpose of binning things like this. The whole idea is sacrificing more valuable high performing dies to maintain stocks of a lower priced product. To avoid potential lost sales and other problems (as a temporary measure too). Separating them out into a higher priced version completely negates that.
The AMD thing was pretty early in the multicore days, before current binning practices were set in stone. And the software deactivation seems to have been the standard way of doing it at the time. I suppose it was faster and more cost effective when you weren’t doing as much of that sort of thing.
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They’re already doing this in a sense. You can turn off most of Windows 10’s bullshit if you spring for W10 Enterprise.
@tlwest: As far as the labor theory of value: that’s because you fundamentally misunderstand it 
Whether you’re reading Smith or Marx, it’s made abundantly clear that labor != hours, in the sense of “it’s obvious that an hour’s work in a coal mine is more labor than a whole day’s work at an office job” (I think that one was Marx…)
So yes, maybe that book took 3 months to make, but it was 3 frantic months of them obsessively working on the book, as opposed to a year casually throwing a sequel together. Think of labor as the energy exerted, not as the time spent. I would also point out, relevant to this thread, that LTV only tells us about the value, not the price. In a capitalist system you’re always paying more than a thing is worth in order for there to be a profit margin. For example if you expend more labor (extra programmer time) to cripple your car intentionally in order to create a larger profit margin…
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There is a form of battery-babyer in a sense in some models as far as I know. By not enabling the high performance mode, you limit the instantaneous current that can be drawn.
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Depends what time frame. It may not be in most shareholders’ interest…
But fuck short-term investors anyway, I say
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Sure they have. Here’s a good article covering the gear and the upcharges – it’s the same battery, just a different limit on when it’s considered “full.” Model X owners just pay their $4,500 and, “Owners can simply go to their ‘My Tesla’ page on the company’s website and order the upgrade. A few minutes later, it will be available.” It’s simply an OTA update, not rocket science. <g>
Pbly worth noting that this Irma-induced extended range update is temporary.
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Holy crap I can’t believe this article is almost to 100 comments!
I can’t afford a model S, but I could aspirationally look to the S60 as something I may have eventually afforded, then enabled the extra distance later. Unfortunately I no longer have that option, and will instead wait for my pre-ordered Model 3.
For me, I’m excited to have a car that gets continuous updates instead of being abandon ware at point of sale. I hate most of the software features of my car, but the software for the next model year is incompatible with mine, so I’m stuck. My car telling me where it is is also pretty awesome given the number of times I’ve lost it in the vastness of the Canada’s wonderland parking lot and had to play “horn echolocation” to find it.
Tesla had a way to make a vehicle cheaper for those who can’t afford it. You don’t like it? Don’t want a trackable, upgradeable car? Great! Buy something else!
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I’m onboard with the concept that the 72kwh model effectively subsidized the 60kwh model for market penetration. Like everyone else says, it’s not really product binning (like CPUs)
This is far more like Microsoft OS pricing. The cost to develop the product was the same, but if you market a lower configuration for less price, you get more market. Some of that market will later choose a higher tier because the value is there.
Yes it’s shiesty to do this, but if you sold everything at the lower tier, the product wouldn’t exist to begin with.
One of the missing pieces of data that we won’t probably get will answer this: does the sale of the 72kwh vehicle at the 60kwh price keep the margins positive, and is there a clear target point where the incentivised sales of the 60kwh model cross into the same cost as the 72?
If Tesla was a “good” corporation, they would at some point activate all 60kwh vehicles to become 72. If they are a “bad” corporation, they would continue the market divergence.
Good and bad mean different things to different people too. Investors would see “bad” (from the article perspective) as as “good” because their investment is maximized.
Since Tesla recently discontinued the 60kwh model, I think k they walked a middle line: the 72kwh subsidization program was a success, but due to investor steering, could not set a precedent for free upgrades of the 60kwh vehicles unless there was some good excuse - which we just saw.
Someone in charge of the financial model for this whole thing had to consider the golden handcuffs of outside investment and probably made lemonade from lemons.
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I stand corrected. However, my point is that the amount of effort the author spent should be utterly irrelevant to my valuation of it.
Well, that and I know enough authors to understand that it’s often the books that were the least effort that are their best works (in both their own and others estimation). Totally unfair and rather demoralizing for authors crying into their soup about their current book from hell.
Anyway, I understand our brains are mis-wired into thinking “effort” = “result” and that information coded tangibly is inherently different from information coded intangibly. (Still remember a weird conversation with a student who was highly uncomfortable about photocopying a book, but was fine with downloading pirated e-books. One was “real”.)
I just figure we shouldn’t be trying feed that particular bias.
Um. Why? I define a “good” corporation as one that makes it clear exactly what they deliver for a well-defined price. They are not obligated to give me more than I agreed to pay in order to retain their “good” status, even if it costs them nothing directly.
The “bad” bin is reserved for those companies that try to obscure the service-price bond, change it unilaterally after the fact, abuse monopoly status, or abuse their employees. Outside of that, if they can magically make something for free that I’m willing to pay for, lucky them!
(Sorry, I was asked to fill out another stupid survey which they obviously wanted “went above your expectations” in multiple categories. I hate that! I want my expectations met and no more - I don’t want staff hanging around trying to “exceed my expectations”.)
{Edit - total aside but didn’t want to add another post - Corey’s article from which he took a few thoughts for this article http://www.locusmag.com/Perspectives/2017/09/cory-doctorow-demon-haunted-world/ is excellent!)
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The pricing thing, I can’t get worked up about. Tesla’s overall profit margins may or may not be “too big”, but this operational detail doesn’t shed any light on that; it’s certainly not valid to conclude that they could have sold the 259kJ model at the cheaper price. I’m sure someone could do a pastiche of the opening post, railing at the scandal of Walkaway’s hardback price, but it’d be equally unedifying. If you’re selling 1,000 things to 1,000 people, and there’s a way to have the richest / most invested customers pay more, that’s a good thing, especially if the benefit is passed to the poorer customers.
However, the way Tesla did it is certainly flirting with evil, if not fucking it in a truck stop bathroom. I don’t necessarily think incentivising people to hack their cars is a good plan, but Tesla could have achieved the same goals by, say, giving high rollers waiting list priority, instead of investing in the system where companies use legal threats to make the public cooperate with their preferred business model.
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Most folks seem to forget their mean time between failures on that score already beats the hell out of human drivers… Either that or for some reason, machines occasionally killing people by accident is somehow less tolerable than humans frequently doing it.
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Tesla does a nice thing for people in the path of a life-threatening hurricane, gets shit on for it’s business model. You just can’t please some people.
If you don’t like Tesla, for any reason - please do go spend your money elsewhere. You vote with your wallet! If these practices are actually so abhorrent and harmful, the market will select against them.
But maybe, just maybe, some people realize that many decisions in life are a compromise between their own interest and the interests of the vendor, and society as a whole - and are willing to trade a bit of control for the features it allows both the vendor and consumer to take advantage of. Feel free not to participate.
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