Re Actually, you can set up a model where Microsoft charges too much and too little. The idea being that it charges too much for the stuff it has no competition to and too little where there is competition, to crush that competition, so that it can later charge too much in this area.
Except that when I review the products offered by Microsoft, I find that in the area of OS, where it is my opinion that Microsoft has very little in the way of worthy competing products, the price of $89 for Win95/98 upgrade is quite reasonable, particularly in consideration of the cost of other components. Many products, both software and hardware, don't even offer an "upgrade" price. Quickbooks comes to mind. For every new version, you have to simply repurchase the product (in QuickBooks case, it's $89).
Then consider the areas in which Microsoft has worthy competition:
Office application suites: Corel WP Suite, Lotus SmartSuite.
Microsoft Office 97 SBE upgrade: $180 (after $40 mail-in rebate)
Mouse: Microsoft standard two-button mouse is the most expensive two-button mouse out there at $69. Most other mice are in the $30-$40 range, and I've even seen them for $10-$20.
Imagine selling a mouse for only $20 less than the whole operating system (no "upgrade" price on the mouse, either).
As far as the browser -- The reality is that the stand-alone "browser" is on the scrap heap of history. Netscape's browser is simply a victim of advancing technology -- joining a long gray line of such products stretching back to the beginning of this century.
In Microsoft's case, I think the model would be: Microsoft over-charges for the OS itself so it could give away the browser for free.
So, I guess you could say one can offer many different "models" depending on what products you want to compare. |
