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1 A product's design can be more valuable than

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Manager
Manager
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Joined: 01 Aug 2008
Posts: 118
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1 A product's design can be more valuable than [#permalink] New post 13 Jun 2009, 07:27
1 A product’s design can be more
valuable than the product itself. With the
advent of the personal computer in the
1970s, the computer-manufacturing
5 sector, an industry then dominated by
those giants able to afford incredibly
specialized knowledge and to produce
equally expensive products, suddenly
found its brightest lights shining in the
10 garages of clever engineers. Large
manufacturers responded slowly but
eventually arrived at a lucrative solution:
IBM developed its own personal
computer and permitted other
15 manufacturers to copy its design in
exchange for royalties. This move
brought the computer giant’s greatest
strength to bear—an enormous reserve
of engineering brainpower—and
20 ensured its continued control over a
broad stretch of the personal computer
market. At the same time, the broad
selection of IBM “clones” available
brought prices down and ensured the
25 product’s mass-market appeal.
The upstart companies that gave older
manufacturers so much trouble to begin
with soon found themselves in a difficult
situation. Despite their innovative
30 operating systems, which converted
computers from specialists’ tools into
devices nearly as easy to use as
toasters, these companies may not have
reaped their full reward, as they have
35 jealously held onto exclusive rights to
manufacture the machines that run the
new systems. Only recently have these
smaller companies begun to license
their hardware designs and operating
40 systems, paving the way for clones of
their own. Yet the young companies lag
far behind both IBM and those software
developers who have reaped huge
rewards from the personal computer
45 bonanza, leading many analysts to
wonder if the smaller companies’
machines will remain the expensive
luxuries that they have become in the
home-computing market.

1. According to the passage, which of the following resulted from “cloning” in the computer industry?

I. The failure of younger, smaller computer manufacturers to realize their full potential
II. The creation of low-quality, low-cost home computers
III. The introduction of specialization into the computer industry

I only

II only

I and II only

I and III only

II and III only
_________________

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Do not answer without sharing the reasoning behind ur choice
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Working on my weakness : GMAT Verbal
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Why, What, How, When, Where, Who
==============================================

Manager
Manager
Joined: 24 Apr 2009
Posts: 94
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Re: computer-manufacturing sector [#permalink] New post 16 Jun 2009, 07:38
IMO A i.e. only statement 1 is true as it is clearly mentioned in lines 32 - 35. Now statement 2 ir incorrect coz it is never mentioned that cloning resulted in low quality machines, rather the passage says that the price decreases after the introduction of cloning.
Statement 3 is never mentioned in the passage the way it is mentioned here..
HTH
Senior Manager
Senior Manager
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GMAT Tests User
Re: computer-manufacturing sector [#permalink] New post 16 Jun 2009, 10:33
IMO too A..

1) as its is mentioned in the passage that

" spite their innovative
30 operating systems, which converted
computers from specialists’ tools into
devices nearly as easy to use as
toasters, these companies may not have
reaped their full reward, as they have
35 jealously held onto exclusive rights to
manufacture the machines that run the
new systems."

the small companies failed to realize their complete potential
Director
Director
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Posts: 841
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GMAT Tests User
Re: computer-manufacturing sector [#permalink] New post 16 Jun 2009, 19:47
yeah I only
Re: computer-manufacturing sector   [#permalink] 16 Jun 2009, 19:47
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