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Microsoft slashes WinXP price to kill Lindows OS | |
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| Time: 08:52 EST/13:52 GMT | News Source: the inquirer | Posted By: Brian Kvalheim | ||
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Founder claims MS uses money to block retail sales THE FOUNDER of Lindows, Michael Robertson, has penned a piece on techzone in which he alleges that Microsoft is using its vast financial resources to block his firm's OS being sold by retailers. And that means one Lindows OS retailer is being wooed with a price of just $50 for Windows XP in an attempt to wean it off the competition.
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| #1 By 2332 (65.221.182.2) at 6/8/2003 1:21:06 PM |
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Damn you Microsoft! How dare you compete! How dare you LOWER prices!
Wait... wasn't one of the biggest points during the anti-trust trial that Microsoft charged too much for Windows? Bah, ignore the details. Down with M$! |
| #2 By 13998 (217.122.34.74) at 6/8/2003 2:41:18 PM |
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I am afraid you all gave reactions too quick.
I don't know if any of you studied economics but it is true that you cannot always sell goods / services 'cheap'... and yes, this is to protect consumers. A big company may afford losing money; this would be somewhat an investment for the future. So they lower their prices, small companies cannot compete, they go bankrupt, the big company remains and increases the prices of the goods/services to a level even more than the initial prices... It depends on the market and the position of the company in that market. For example, no one can sue Microsoft for selling Xbox so cheap (that they lose quite a lot money per Xbox) since they are far from being the market leader. But, say, in 5 years if Microsoft's share becomes 60%, they definitely would not be able to sell Xbox for the current price. In early 90's Volkswagen had a similar problem. They were sued and it was proved that they were selling the cars too cheap, they were losing money deliberately to get rid of the small companies in the market. They had to raise their prices. By the way.. I have no idea if Microsoft loses money by sellin XP for $50. If they still make considerable profit with this price Lindows has no stand point. |
| #3 By 135 (208.50.204.91) at 6/8/2003 2:52:22 PM |
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Consider these facts:
- Numerous lawsuits were filed after the anti-trust ruling, claiming Microsoft had overcharged consumers. One of these was out in California, and I believe it's already been settled. - It was reported that Microsoft has signifigantly high profit margins(80%) on Office and Windows, so they can afford to cut prices by at least half, probably more when you consider that pricing cutting will increase sale volume. So on the one hand you have the ABMer league complaining that Windows is priced too high, they use the above facts to prove that. They also claim that with competition prices would be lower. So now we have competition, the price is going lower, and... Now the ABMer league is whining that this is unfair. This post was edited by sodablue on Sunday, June 08, 2003 at 14:52. |
| #4 By 135 (208.50.204.91) at 6/8/2003 3:14:19 PM |
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BTW, I want to make an observation.
If you look at the auto industry... competition has resulted in lower prices followed by a trend towards more features, larger cars and increased pricing. But the increased pricing is clearly not a result of monopoly control, but rather of added cost to provide features that consumers are demanding. It's been a cycle. Ford was the low cost operator... then you had Plymouth, then I don't know... Volkswagen, then Honda, then Hyundai, now Kia. I guess the point is, I think making a statement like "bigger company drives smaller company out of business and then raises prices" is wrong, as I've never seen this happen. What is far more common is "smaller company attracts consumers with lower prices, then increases features and subsequently prices and returns to equilibrium with older competitors". Mini's came in lower priced than Mainframes... then went up in cost. Unix came in with lower prices than Minis... then went up in cost. Microsoft came in with lower prices than Netware or Unix, and then went up in cost. Look at the pricing from Linux vendors. Over the past 4 years, their prices have gone up. Can anyone seriously claim that they have had to raise prices in order to compete against Microsoft lowering prices? |
| #5 By 135 (208.50.204.91) at 6/8/2003 3:16:35 PM |
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kevinu - Yeah, the Lindows arguments don't make much since from a logic standpoint. Apparently they feel that competition should be a stationary target.
It's like playing a game of hockey and yelling at the goalie "No fair! You moved, you're not supposed to move" |
| #6 By 16451 (65.19.16.103) at 6/8/2003 4:26:22 PM |
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#9 >>> I think making a statement like "bigger company drives smaller company out of business and then raises prices" is wrong, as I've never seen this happen.
Have not not studied the agricultural industry? And what then happened to all the "ma and pa" shops that used to dominate many marketplaces? |
| #7 By 3653 (209.149.57.116) at 6/8/2003 5:18:07 PM |
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Actually RH7.3... the ag industry did something like this...
ma_and_pa_#1 competed with ma_and_pa_#2. Well, #2 developed a more efficient way to harvest a larger crop. So little ma_and_pa_#2 became "big company" and ma_and_pa_#1 went out of business. Now THAT is very different from what you describe. Your story draws a picture of a faceless big company coming into the agriculture industry and destoying the natives. Thats just not true. |
| #8 By 7390 (63.211.44.114) at 6/8/2003 5:19:41 PM |
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umm..wasn't the point of competition was so that Microsoft would be forced to lower their price? As everyone pointed out wasn't a knock against Microsoft was that their prices were too high?
Heck, this even has me thinking about buying a License. What a truly evil plan! lowering the price of something that every thought was over priced. |
| #9 By 135 (208.50.204.91) at 6/8/2003 6:25:56 PM |
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RH7.3 - "Have not not studied the agricultural industry? "
The only point I'm making is that markets do not follow some set cut and dry rules. Different circumstances evolve depending upon the producer/consumer relationship. Actually in the Ag market, it is pretty obvious that grain is more economical on a large scale, but there is some argument as to whether raising animals is more efficient on a large scale. |
| #10 By 2332 (65.221.182.2) at 6/8/2003 6:43:17 PM |
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#11- "Have not not studied the agricultural industry? And what then happened to all the "ma and pa" shops that used to dominate many marketplaces?"
LOL. They sold out to ADM. Those that didn't now work for ADM under contract. I would suspect that very few were ever driven out of business by ADM because ADM is made up almost entirely of former Ma and Pa farms. |
| #11 By 135 (208.50.204.91) at 6/8/2003 8:29:21 PM |
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Phaedrus - Sony isn't Microsoft.
Therefore it's ok. |
| #12 By 16451 (65.19.18.104) at 6/8/2003 9:40:04 PM |
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#12 >>> Now THAT is very different from what you describe. Your story draws a picture of a faceless big company coming into the agriculture industry and destoying the natives
You really need to learn how to read. I told no story. I simply asked two questions. |
| #13 By 16451 (65.19.18.104) at 6/8/2003 9:45:53 PM |
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#14 >>> The only point I'm making is that markets do not follow some set cut and dry rules
Huh, your original statment ... I've never seen this happen. What is far more common ...sounded pretty cut and dry to me. |
| #14 By 135 (208.50.204.91) at 6/8/2003 9:51:28 PM |
| RH7.3 - Personal observations are not assertions of fact. |
| #15 By 16451 (65.19.18.104) at 6/8/2003 9:57:41 PM |
| #15 I said "ma and pa" shops that used to dominate many marketplaces. So while my second question could be construed as being with associated my first question, that association is neither implicit or necessary. As to your response, I would imagine that history teachers will just be overjoyed that they can now express that particular chain of events in history in a single sentence. I would also imagine that the thousands of families that were forced to leave their preferred lifestyle for one of industrial/manual labor in the city will be releaved that the whole episode was just a figment of their imagination. |
| #16 By 16451 (65.19.18.104) at 6/8/2003 10:04:14 PM |
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#21 >>> Personal observations are not assertions of fact.
Then they are irrelevant, as must then be your original post. |
| #17 By 2231 (68.100.112.96) at 6/8/2003 10:10:15 PM |
| I hope MS isn't violating any dumping laws with this. |
| #18 By 2332 (65.221.182.2) at 6/8/2003 10:46:08 PM |
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#22 - Oh give me a break. Your knowledge of the history of agriculture in America leaves a lot to be desired. The downfall of ma/pa farms had nothing to do with big business competitors lowering prices.
The single largest cause of the exodus away from family farming was the droughts that swept the bread basket during the 30's. Combine that with the Great Depression, and you had a recipe for disaster. |
| #19 By 135 (208.50.204.91) at 6/8/2003 11:13:28 PM |
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RH7.3 - "Then they are irrelevant, as must then be your original post. "
On the contrary, they are very relevant to myself. Now if you wish to prove the original assertion correct, and as such dispute handidly my personal observations by showing that in all cases as more competition is introduced to markets the price always declines... I would be happy to analyze my personal observations and see what I was missing. But meanwhile from my personal observations I have created a hypothesis that markets do not always behave how you think they do. I am actively working to validate my hypothese through additional data collection and analysis. |
| #20 By 8062 (68.107.23.145) at 6/9/2003 1:48:30 AM |
| I'll gladly contribute 50 bucks to kill Lindows, Linux and that POS english rag, inquirer. |
| #21 By 13998 (217.122.34.74) at 6/9/2003 4:43:46 AM |
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#9 I think making a statement like "bigger company drives smaller company out of business and then raises prices" is wrong
Some big companies practiced this in the past and some big companies may practice this in the future. Laws are not made out of nothing. If not known by experience, this law wouldn't be made in the very first begining. Here we are not talking about droping the prices due to increased efficiency or competiotion, but droping the prices to harm another company that cannot afford losing money. As I said before I have no clue if Microsoft is doing this on purpose. But my common sence says they should be still making a lot of money by selling XP only for $50. Some people seems to turn against the law just because another company used it to sue Microsoft. Let's say Lindows is misusing this law. Still this does not make the law wrong. |
| #22 By 16451 (65.19.16.34) at 6/9/2003 8:50:49 AM |
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#22 >>> Oh give me a break. Your knowledge of the history of agriculture in America leaves a lot to be desired. The downfall of ma/pa farms had nothing to do with big business competitors lowering prices
How do you know? Where you there? By the data in your profile and your attitude and knowledge I would think not. But, believe it or not, there are people around that were. |
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