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Technology Stocks : How high will Microsoft fly?
MSFT 472.22-1.3%Nov 21 9:30 AM EST

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To: drmorgan who wrote (11769)10/25/1998 1:37:00 PM
From: ed  Read Replies (2) of 74651
 
Well, It seems you are not a business man , and probably did not even understand the whole high Tech industry.

First I would say it is very common for the high tech industry to integrate different
products to either increasing the performance / price ratio which will benefit the consumers.

Example: 1) Semiconductor companies integrate different function blocks into
the existing product all the time to reduce the cost and product
performance at the same time, while the price of the improved
products will be even lower.

2) Auto companies always set additional features as standard while
the price will not be changed, example : Companies may add
ABS break as standard for their new models, while the price may not
be increased.

3) Softwareware companies also integrate their products together to
make the new integrated product perform better and the
price of the new product may not be increased, and sometimes will
be decreased. Say, one company has x, y, z, w products, it may
give away x products , so that they will promote y, z, w products
and make more money by selling more y, z, w products. Or they
may integrate x, y, z, w as one new product and sell it at a new price.
As I said , most of the cost for Soft ware company is R&D, after it
get the R&D expense back, the additional copies it sells is almost
pure profit. So, there are big rooms for software to reduce price
while still enjoy a big profit margin.

I do not think Microsofy is giving away the IE free, because it is integrate it into OS
, which means it is improving OS while at the same time maintain the same price of OS . This only improve the OS, and benefit the consumers. And this will also promote the E-commerce business of Microsoft, as well as Yahoo, AMZM , ALO ...etc. It also benefit the whole economy as well, because all OS from Microsoft has
an browser included, and every user of OS will have a chance to buy airline ticket through internet ...etc. Even if MSFT did not integrate IE into OS , but just give
IE free to the consumers, so that it will promote its e-commerce business. It is nothing wrong with that either.

If based on DOJ's theory, then the price of every new product should be raised, other wise it will be called unfair market conduct. So, the price of FORD 1997 new car
should be higher than that of 1996, and the price of 1998 should be higher than 1997. So, when Intel integrate the video and audio capacity into its new CPU, the
price should be much higher , otherwise , Intel will be counted as dumpper of market,
and violate the anti trust law. Which means, the inflation will be sky high after couple of years. Because all companies will have to increase the price of their
new products significantly to meet the DOJ's anti trust standard so that they will
not be suited. This is a disaster to the consumers and economy.
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