In 1905 there were less than 100,000 total cars on US roads, and the price of a car was 2x-3x the average annual wage of a US worker.
That means that in terms of the years an average person would have to work to buy a car, the cars of 1905 (which had about the power of a modern lawn mower and a top speed of perhaps 30 miles per hour) took as long to save up for as a modern Corvette Z06 Supercar or Porshe 911 Turbo.
This all changed with the Ford Motor Company as with development of the Model T Ford.
The Model T was the first truly mass produced car, and after launching in 1909 at a price of $850 (about $30,000 in today’s dollars) Ford developed efficiencies which allowed it to drop the price of a Model T to $260 by 1925.
Given that by 1925 the average US worker make $1,200 per year, that means that a Model T was equivalent to less than three months of wages for the average American. And a result, sales went from thousands of cars a year to millions.
In this week’s episode we look at how passing on the savings from manufacturing efficiency can turn a tech product enjoyed by the few most fanatical fans into a mass market phenomenon.
And after looking at this trend in the early days of automobiles, we examine it in personal computers and smart phones.
