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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Jon Stept who wrote (80036)	4/26/1999 3:34:00 AM
From: Amy J	Read Replies (1) \| Respond to of 186894

Jon, Re: "Could this be a more profitable software revenue model, or would they refuse to offer it because it would cut into their profit streams? (I tend to think the latter.)" As a rule of thumb, in the shrink-wrapped world, upgrade programs tend to bring in more revenue than the initial purchase. Upgrade customers make for nice annuity payments, as the customer base grows. Even in hardware we see this: HP nearly gives its printers away at cost, just so they gain the guaranteed annuity payment streams from its customer base in the form of print cartridge purchases. [They're very protective of their cartridge IP.] In Internet space, there is some evidence of impulse buyers being more willing to part with a dollar here or there for a transaction service (e.g. eBay) than they are with a one-time initial payment. When you add all of these three together, there's an interest to charge customers by their transactions, or monthly subscription fees, rather than through a one-time product/service payment (which may tend to bring in less money than the monthly fees or transaction fees.) Annuity payments (e.g. AOL) tend to make for better revenue streams and they also make business planning easier. Amy J