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

To: Larry Sullivan who wrote (10975)9/24/1998 11:04:00 AM
From: Daniel Schuh  Read Replies (2) | Respond to of 74651
 
Larry, you're right about the retail price versus the OEM price, of course. On the other hand, the proportion of the cost has risen a lot. Ballmer's line was that the business model was 2% of the cost, which was about right for $2000 PC's and $40 OEM Windows (approximate, not precise figures of course) I guess the business model calls for a higher rate at the $500-600 price point. Cost of everything else has plummeted. Something to do with competition? Nah.

Cheers, Dan.



To: Larry Sullivan who wrote (10975)9/24/1998 10:18:00 PM
From: rudedog  Read Replies (1) | Respond to of 74651
 
OEM pricing for Win98 is less than $60 for the big OEMs, so it is about 10% on a $599 PC. But that is still too high and I look to MS to revise their strategy for the low end. Otherwise they are opening the door to Linux among others. The low end will continue to drop over the next year, with prices below $400 for some models, and clearly MS must do something to stay in the game.


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