Re: Windows pricing... (exact figures)

[Milan Zimmermann <mzimmerm@worldchat.com>]

Paul Rickard wrote:
> 
...
> Remember when BillG told the Senate that
> "Another sign of a healthy, competitive industry is lower prices," and
> then pointed out the 10-million-fold decrease in computing costs since
> 1971? 

This many-fold-decrease argument, (used by Cato institute in their
arguments as well) is particularly poor. None of these people mention
that the MARKET in the software industry has increased tremendously as
well (anybody knows the number?). And, in software, the first copy you
ship may cost $100 million to produce, but all the other copies cost $1
- price of the medium. So at some point, every new seat sold makes 99%
profit margin.

One just cannot make a fair comparison to GM cars as these people love
to do. The first car may cost $100 million to develop, but the profit
margin can never be more than, say 20%, no matter how many cars you
manage to sell. (Unless the company reaches a monopoly and increases the
price at will.

Regards, Milan Zimmermann