How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 478.53

-1.0%

Dec 12 9:30 AM EST

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To: SunSpot who wrote (46388)	6/10/2000 2:07:00 PM
From: SC	Read Replies (1) of 74651

It comes down to the bottom line. If someone else can offer the same sort of reliability and service that SUNW offers, using a cheaper platform than a SUNW solution, this will put pricing pressure on SUNW. If margins go down, earnings go down unless they can find a price point that increases volume enough to offset the decreased earnings/unit sold. It could very well turn out that Linux on a transmeta platform is the real future threat to SUNW. Then again, it could be that the microsoft OS is cheaper to service on whatever hardware platform. At present, the SUNW business model is based on relatively high margin, low volume sales; whereas the Wintel model has always been lower margin, much higher volume in comparison. The folks at SUNW have recognized the potential peril in this business strategy, which is why JAVA is so important to them. Steve

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