Justice Department and Consumers Alike Await Windows 98 nytimes.com
The good gray Times has been a little light on coverage lately, but this is a good story. Not that they take the latest rumors seriously.
Any sales forecasts, though, would be scrapped if federal or state officials tried to block the shipment of Windows 98. A report over the weekend, first on PC Week Online, an online industry news service, said the states were planning to file a suit to stop the release of Windows 98.
But a person close to the 12 states investigating Microsoft said that blocking the product was not the favored strategy of most of them. The states, he added, would prefer to coordinate their position with the Justice Department. And the federal government is looking at remedies that would open the new markets of Internet software and online commerce to competition and innovation instead of actions to stop Microsoft from bringing out products.
Sounds ok to me, the story about states blocking Windows98 seemed a little short on specifics.
Microsoft's strategy for Windows 98 goes beyond selling operating-system software. It is also using its leadership position to try to prod the personal computer industry into providing new equipment and services.
The company is offering PC makers discounts on the price of Windows 98 if they install tuner cards to receive television signals and display the video images on their PC screens. Microsoft's contracts with the manufacturers are confidential and they vary somewhat company to company. However, industry executives who spoke on condition of anonymity said Microsoft had been offering discounts of $15 to $20 off the Windows price to PC makers -- typically in the mid-$40s for each machine -- if they installed tuner cards.
For PC makers, the price of TV tuner cards can be as low as $25. So Microsoft seems to be offering a considerable subsidy -- through the pricing of Windows -- to encourage the adoption of TV tuner cards. Further encouragement can come from the market development agreements Microsoft has with PC makers, under which it provides marketing and promotional support for these manufacturers. "Microsoft has the power and the money to make things happen in this industry," said Richard Doherty, president of Envisioneering, a research firm.
That's quite a discount, $15/20 off of $40-something. All worth it, though, in pursuit of the next "proprietary lock" aka monopolistic death grip. Of course, I've expressed my doubts on "convergance" before, I got no idea why people are supposed to want to stare at TV by themselves on their PCs.
"Microsoft is trying to use its Windows operating-system dominance to leverage itself into a dominant position in another market," said Kevin Arquit, a partner in the law firm Rogers & Wells and a former Federal Trade Commission official, who is a consultant to a Microsoft rival, Sun Microsystems.
Microsoft denies that such incentives are an antitrust issue. Without discussing contracts specifically, a Microsoft executive noted that the subsidy is for a hardware product, which Microsoft does not produce, and while the company's WebTV service uses the hardware, so do others. "This is good for any company that wants to provide TV services, good for the industry and good for customers," he declared.
And if another monopolistic death grip gets leveraged off the Windows monopoly, well, that's innovation. That's what the customers want. That's Bill, taking us where we want to go! That other guy, he was bought, unlike oft-quoted Charles "Rick" Rule, reliable conduit of the truth. Rick usually gets a proper attribution these days, anyway.
For the producers of PC hardware add-on equipment, Windows 98 is seen as opening the door for a surge in sales of devices like digital cameras, scanners, gaming joy sticks, specialized computer mice and speakers. The new operating system supports an easy-to-use hardware plug-in technology called a universal serial bus. With Windows 98, the user can plug in many different devices without getting special software and installing it.
. . .
"With Windows 98, we're finally getting the software support that the hardware manufacturers have wanted for the last two or three years," DeLuca said. "It shows that ultimately the pace of change in the industry is controlled by software."
Right. And may USB actually work this time, depending on whether Bill's excellent Comdex adventure was staged or not. Anyway, if it gets support in Windows after a mere 2-3 years, it's doing pretty darn good, compared to the 8-10 years it took Microsoft to ship an OS that allowed Intel's ever-faster 32 bit processors to be used as something other than fast 286s with Windows. Oh, I forgot, it's like Bill told the Harlem kid, it took awhile for the hardware to catch up with bloated Microsoft software there, not vice versa.
Cheers, Dan. |
