Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: ToySoldier who wrote (44334)	5/5/2000 1:08:00 PM
From: Andy Thomas	Read Replies (2) \| Respond to of 74651

>>Dont be naive Andy. The OEMs are one of many victims in MSFT's unlawful activities.<< No, if they were victims it was because they had no genitals. FWIW Andy

To: ToySoldier who wrote (44334)	5/5/2000 4:04:00 PM
From: rudedog	Respond to of 74651

Toy - you are the one who is naive. I worked with many of those OEMs in the mid-90s - IBM, HP, CPQ and DELL to name the most prominent. None of those guys were afraid of MSFT in the least. Sure, they wanted to maintain good relations with a key supplier, but that was about it. Your ideas about how the licenses were priced are also incorrect and clearly not based on any knowledge of how those contracts actually worked. And except for the mom and pop shops, PC margins were pretty good until about 1997, when they started to decay somewhat. The average selling price of a PC from the big 3 in 1996 was $2700 with gross margins around 29% and net around 10%. So the PC maker was clearing $270 at the end of the day. And that's not "list" price, that's what actually happened based on company financials as published in their earnings reports. So whether they were paying $45 or $50 or $70 for Windows was just not a big part of the equation - at most a 1% shift in cost of goods. And the discount schedules were nowhere near that large - the biggest guys paid in the low $40 range, and any mom and pop could buy in the mid-50s, quantity 3 units. And there was no requirement to even ship the OS with the PC - for CPQ, IBM and HP, that could easily have been fulfilled in the channel, and DELL could have bought on the open market for a few bucks more than they paid MSFT directly. So you are basically completely incorrect in your post - both on the potential cost impact, which is obviously not enough to affect anything, and in the notion that MSFT could have used it for leverage. A minor swing in memory pricing affected the cost of goods more than the whole of the OS cost. I'm surprised, you usually do better.