To Ms. Do, oversupply in semiconductors or LCDs is a common occurrence. Of course, it is not as catastrophic as bananas or tomatoes. In such instances, the inventory value goes to zero mainly because people can eat only so many bananas regardless of the price. In the case of LCDs or semiconductors (especially memory) the vendors just end up putting in more of the stuff into existing systems--going from 512 to 1gb; or 15 inch to 17 inch--all for the same price range.

There were two interesting articles that run with the grain of our class themes. The first is an article by Walt Mossberg of the WSJ. You may remember in the Innovator's Solution that a key is defining the scope of the operation--that companies that develop disruptive "new" things will often need to control as many points of the value chain and system interface as possible whereas modular "cost" based technology companies define their specialty and outsource and rely on technology standards (such as GSM or CDMA, or Wireless Lan protocol 802.11 or Wide area wireless called Wimax or 802.16) or ready-made modules for the rest for the full development of the system. In this article Mossberg compares Apple to Microsoft.


Note that the WSJ is a subscription service. If KDI does not have a subscription, you would do the school good by asking for one. If you cannot get it, let me know and I will send it out.

A second article is on the fact that IPOD phones will be introduced in Japan through Softbank. How do you think the deal got started? Why would Apple choose to start in Japan?