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

To: stak who wrote (11874)	10/28/1998 9:49:00 PM
From: Gerald Walls	Read Replies (1) \| Respond to of 74651

ed, I read your post over a couple of times . It baffles me. I think the analogy is a poor one. Are you suggesting car makers should integrate the air conditioner and then give it away for free? Just as Microsoft has done with Explorer??? BTW I think that'd be a great thing for consumers if the price could be keptr the same or just slightly raised. Interesting all that a car comes with now. I paid over $15,000 for my Mercury Capri in 1985 and about $14,000 for my Nissan Altima in 1995. My Altima has more features and pollutes less. I'd say the analogy holds.

To: stak who wrote (11874)	10/28/1998 11:34:00 PM
From: ed	Read Replies (1) \| Respond to of 74651

I think you still did not get my points. My point is MSFT did not give its IE free. As I said the major cost of software products is the R&D cost, once after the sale of the first one or two million copies which recover the cost of development, the additional copies sold will be pure profit. The cost of marketing and and support for MSFT's OS is very low, and the cost of manufacturing is even lower. MSFT can still make a fat profit on OS even if the price is dropped to $10 once the cost of development is recovered. With IE integrated , and the price of OS is still sold for somewhere around $50, who said Microsoft is giving the IE free ? The price of OS is very low comparing to what it is about 10 years ago relative to the average income of US families. As the price of hardware continues dropping, the percentage of OS expense is higher relative to the price of the whole PC system, but the law did not say that as the price of car is dropping, the price of gas has to drop accordingly, because the price structure is different between the two, which is translated to the fact that the law did not say the price of the OS has to drop together with the drop of hardware.