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Technology Stocks : How high will Microsoft fly?
MSFT 476.24+0.3%3:59 PM EST

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To: t2 who wrote (14057)1/9/1999 10:19:00 PM
From: JP Sullivan  Read Replies (1) of 74651
 
Pardon my venting, but where does this consumer group get off telling a company how much it should charge? Or how much is too much, for that matter. This is too bizarre to be believed. Isn't this supposed to be the USA, the world center of capitalism? So what if costs are coming down. MSFT is not obliged to pass on these reductions to the consumer. Ultimately, it's the market that decides how much it is willing to pay for Windows. Sure, MSFT is going to try to milk the market for all it's worth -- and which investor-worthy company would not? -- but how many copies of Windows would MSFT sell if it charged $500? Not very many, I should think. And MSFT knows this.

It's not as if Windows is the only OS available and people have no other choice. Anyone who thinks MSFT is overcharging for Windows can go out and buy MacOS, Linux, OS2, etc. We're not talking power generation or water supply here, where the costs of providing these essential services are so prohibitive that it is unlikely for more than one or two companies to compete. I think it's safe to say that MSFT's hold on the OS market is by no means secure: if it were to stop all development of Windows today and just live off the current iteration, just how long do you think the company will continue to have a monopoly in the market? The kind of monopoly that MSFT has is not quite the same as that of the utility companies. The software industry is morphing so fast that MSFT cannot afford to be Mr Nice Guy. The line of companies waiting to step into MSFT's No.1 position is just too long.

Winston
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