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Technology Stocks : MSFT Internet Explorer vs. NSCP Navigator -- Ignore unavailable to you. Want to Upgrade?

To: Gerald R. Lampton who wrote (21583)	11/20/1998 9:39:00 AM
From: Reginald Middleton	Respond to of 24154

<Well, I told you to show me the deadweight loss, and today that's exactly what Warren-Boulton did:> How is that shown. The term competitive level is not defined, therefore cannot be proven to be a valid or invalid assumption, much less an empirical number. In order to adequately prove a real competitive price, market forces must be brought in to the equation, for the product is for sale in the free market. An economically derived "book value" will rarely coincide with a market derived value. For instance, NSCP overcharged for its browser ("supra-normal" pricing after the market price was initially set to zero), hence it lost significant market share very quickly. In order to charge a premium, you must justify that premium with the perception of quality. NSCP failed to do that. In fact, the cheaper browser boasted more features, to the detriment of NSCP's client distribution strategy. Windows is able to sharge a premium over OS/2 due to the value added of a significantly richer application pool and reduced cost of training/retraining. With every significant upgrade, MSFT puts this value-add at risk but manages (through proper execution), to avoid supranormal pricing during these critical junctures which fails to open the market vacuum for competitors to prey on - unlike NSCP. Notice the moves from Dos, to Win 3.0/1 to Win 95 to Win 98 to NT4 to NT5. This is due to diligent execution, not predatory practices. RCM rcmfinancial.com