H McKee Stewart Jr

Musings on Business, Finance, and Economcs.

Keurig–The Trigger Un-Pulled

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As most of you know, I’m a confirmed coffee nut. As you probably don’t know, I’ve been dithering for months over whether to get a Keurig K-cup machine. Buy now, buy later? Justify the expense of a hundred clams on a single serve coffee machine, or simply continue with my fully depreciated existing battery of coffee makers?  Granted, there is a lot of convenience, and potential variable cost savings with the fill your own K cup options (at least compared to purchased coffee at various chain coffee joints), but the  payback period always seemed excessively long.

Let’s add another wrinkle: turns out that Green Mountain’s patents on the K-cup design will expire in September.

So, if the price of the K-cup collapses with the patent expiration, should I buy the machine now, or wait to see if additional competitors come forward with copycat designs at a lower price? If the patent driven monopoly price on the K-cup can’t subsidize the price of the machine, will there be additional machine competitors to drive the price down?

If everybody can make a blade to fit the razor, who’s going to subsidize my purchase of the razor?

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Written by hmstewartjr

17 June 2012 at 6:13 PM

Posted in Uncategorized

Tagged with , ,

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