Analyst sees "Wintel" monopoly news.com
Along with everyone else in the known universe who's not into playing word games.
In the end, both companies have emerged as de facto monopolies because they control commodities so as to be able to manipulate pricing, he said.
Intel's abbreviated product cycle, coupled with its almost 80 percent market share, allows the company to effectively control chip pricing.
Meanwhile, due to the relatively abstract nature of software, Microsoft benefits from what Vellante calls "infinite economies of scale," which have resulted in rising prices for Windows 95 even as its market share grows. As a result, normal cost reductions that would occur as a product evolves, as well as potential innovation, have been hampered to a certain degree.
Infinite economies of scale, I should have gotten a copyright on that one. The corollary of zero marginal cost of production, of course.
Further, the two companies are expanding into additional markets where their economic heft carries the potential of creating similar market conditions.
Too bad about that pesky Sherman Act, though. It's so unfair that it applies only to monopolies.
Cheers, Dan. |
