From: wingo@apple.com (Tony Wingo)
Subject: Re: new encryption
Organization: Apple Computer
Lines: 27

In article <1993Apr22.092959@magic.mcc.com>, croley@magic.mcc.com (David
Croley) wrote:

> 
> It would seem that the one fact that the government has overlooked in this
> whole fiasco is the economic standpoint.  As others have mentioned, the most
> difficulty the Clipper chip faces is an economic one.  Let's face it, the
> average consumer doesn't care or know that the Clipper is a bad idea.  If
> there is a perceived need for cellular encryption, then the companies will
> provide one.  Most likely, a standard will emerge.  But if the Clipper is
> too expensive (and $25 a chip is way too much) then they will develope their
> own or buy a cheaper one.  

This is an interesting point.  As a VERY COARSE rule of thumb, you can
figure that the final price of a product is 3 to 5 times the Cost Of Goods.
(The exact multiplier depends largely on economies of scale: Products that
sell tens of millions of units/year will be at the low end, those that sell
thousands of units/year will be at the high end.  I suspect cellular phones
are in the middle).  This implies that adding a $25 chip would increase the
cost of the phone by approx $100, or about 25% - 30%.

I don't think you'll get a lot of consumer support for this.


-tony

>>usual disclaimer<<
