as competi- tors will have trouble competing. And almost every layer is sensitive to price. Greater product differentiation can sometimes allow a product to sell at above- commodity prices, but it can also make it harder to fit into real market needs. It is a tough balancing act but a necessary one. Market needs Applications Service Infrastructure Systems Products Technologies Figure 10.1 Food chain for technological products. A successful product requires all links in the chain to be complete. The Great Telecom Meltdown Competitive Realities Will Change Here is the key to the whole meltdown: Competitive industries do not work the same way as monopolies. It is simply not easy for an industry to make that shift. It is often, however, necessary, because monopolies are the exception, not the rule, in any vibrant economy. And as nature abhors a vacuum, technology abhors a monopoly and tries to work around it. Monopolies can often get a lot more out of an investment than can players in competitive markets. Monopoly telephone companies installed central office switches that lasted 40 to 50 years. Monopolies depreciated the cost of computer memory chips over decades. Monopolies worried about service life. Competitive companies deal with economic life, not service life. Competitors know that plant or a product is retired when it is no longer competitive, even if it still works like new. Competitors know that no matter how big the investment, there is no guarantee of profit or even significant revenue. Given those contrasts, experienced telecom industry managers and investors both had trouble coping with the transition. Competition is usually good. It is usually good for consumers, and it is usually good for suppliers. It can even be good for a market participant: Do Toyota Motors or General Electric complain about not having a monopoly? They pick markets and focus on them, while competitors keep them on their toes and give them new ideas. Competitive companies do not expect to be all things to all people, to supply all p