Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: ARTICLES ON INPUT TAX CREDIT IN VAT :: form 3cd :: Central Excise rule to resale the machines to a new company :: TAX RATES - GOODS TAXABLE @ 4% :: VAT RATES :: empanelment :: cpt :: list of goods taxed at 4% :: articles on VAT and GST in India :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT Audit :: ACCOUNTING STANDARDS :: TDS :: ACCOUNTING STANDARD :: due date for vat payment
Budget Extravaganza »
 Budget advancement helps Centre, states start spending early
 Five things that you can expect from the Mumbai civic budget today
 GST all set for July 1 rollout but casts shadow on state budgets
 Income-Tax collection revised in Rajasthan budget
 No new taxes likely in Maharashtra Budget
 H.P. budget devoid of any financial prudence
 GST, demonetisation todecide budget priorities
 Railways to come up with mini-budget tomorrow
 Budget today, but GST kills the tax suspense
 Budget 2017 does little to expand taxpayer base, salaried still bear brunt of taxes
 Six things Finance Minister did not tell you in Budget 2017

Subsidise tech R&D: Budget 2011
February, 16th 2011

One decade of the new millennium is over and companies, especially in consumer electronics , are wooing customers with new models. Mobile handset vendors are releasing, on an average , about 35 new models in the domestic market every month, indicating a drastic reduction in product lifetime. However, new technology is also at the risk of becoming obsolete very fast. What do rapid evolution of technology and the resultant obsolescence mean for the stakeholders?

Should a customer change her mobile, desktop or laptop every year? How do companies generate economic value out of obsolescence ? Should the government step up investment in public IT infrastructure? First, let us take the effect of technological obsolescence on companies. Technology obsolescence impacts the future economic value of a product or a component, which increases the risk involved in financing its development.

Companies may resort to different strategies to tackle the problem. These include differentiated pricing for an upgraded product, forward or backward integration to gain control of the market for the product, greater R&D intensity to introduce differentiated products or diversification to derisk. In telecom, the move away from proprietary to opensource software adoption, especially in mobile handsets such as Android reduces technology obsolescence cost, both for handset-makers and consumers.

Another trend is the emergence of managed services wherein mobile service providers such as Airtel have outsourced network deployment and management to network equipment makers such as Ericsson and Nokia-Siemens . Airtel transfers the obsolescence risk to the network equipment makers. BSNL has gone a step further, adopting a franchisee model in broadband wireless access. Here, the obsolescence risk is transferred to the franchisee. Also, in technology, obsolescence may not be related to the whole product, but might occur for components that make up the product.

Sometimes , obsolescence rate is faster than the components lifetime. Technology refresh is required either because the component ages or has reached end-of-life . It is also possible that the technology refresh makes the system much more efficient that the extra features make it worth the refresh , or the maintenance costs go down substantially justifying the refresh cycle. Besides industry, technology obsolescence also impacts the consumer. The customer upgrades the hardware or software to stay on top of the technology trend. Pricebased competition is likely to provide similar alternative products to the subscriber and enable her to reduce the technology obsolescence cost.

The success of featurerich mobiles from domestic handset companies such as Micromax, Lava and Karbonn as reasonable cost-effective alternatives to handsets from multinational companies illustrates this customer rationality. A customer can also trade her old incompatible version to reduce costs.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - We Bring IT. Offshore software outsourcing company. We use Global Delivery Model (GDM) and believe in Follow The Sun principle

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions