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In 2013, Volkswagen was caught using a function lock in its diesel engines. The engines were capable of clean emissions, but running that mode reduced horsepower and fuel economy. So, VW used a software lock: The engine ran clean only during EPA testing. The rest of the time, the lock turned the clean function off . (We call that "Dieselgate," and it cost them $30 billion.)
With a function lock, the company manufactures one product. The cost is identical for every unit. But they sell three licenses . The profit margin on the "Good" version is low, but the profit margin on the "Best" version is nearly 100%—because it costs the company nothing extra to unlock the features. function lock
Without a function lock, a company has to manufacture three different products (Good, Better, Best). That means three assembly lines, three inventories, three customer support scripts. In 2013, Volkswagen was caught using a function