Re: Bundling and operating systems

["Lewis A. Mettler" <lmettler@lamlaw.com>]

Joe,

Joe Barr wrote:
> 
> On Sun, 19 Dec 1999, Simon Cooke wrote:
> 
> > (1) What happens if the price remains constant? Or if the cost drops? The
> > retail-store cost of Windows (3.1, 95, 98, 98SE) has dropped over the years.
> > Windows 98 has IE included. It costs approximately the same as Windows 95 -
> > and that's BEFORE you take into account inflation, in which case it costs
> > less.
> 
> Unfortunately, that is not true.  Current versions of Windows cost twice,
> double, take the first and add it to itself, the price of Win 3.1.  That's to
> OEMs, where 99.99 percent of all copies of Windows are sold.
> 
> Retail prices are up about 15%.  Taking into account improved distribution
> methods and packaging and the falling prices of the personal computer industry
> as a whole, retail prices are 2 to 3 times as high as they should be.

Microsoft has the monopoly power to set prices and bundle products.

This is why is you allocate the price of Windows at $200 between the
browser, networking technologies and the OS the price is not too bad. 
But, when you force all consumers to buy all three regardless of their
needs "everyone" pays too much.

$200 is the suggested retail price of Windows 98.  You simply cannot
assume any price a particular OEM charges for it.  Some consumers may
very well pay the $200 freight with premium systems.  The street upgrade
price is not the same product and is not sold to the same consumers
either.

> 
> How does distribution or media come into play?  In one of the long string of
> record profit quarters, MS sought to dodge some of its embarrassment of riches
> by claiming the profits that quarter were the result of using CDs instead of
> diskettes.

Distribution costs are a non-issue except they help monopolist earn
monopoly profits.

It is pure stupidity to suggest that products should be bundled because
of distribution costs.  If you want even lower costs, take a credit card
and download it, right?

> 
> MS also raised the price on NT by altering its license when it claimed that NT
> workstation was fatally ill with a disease known as "socket fatigue."  The only
> cure, per Redmond, was to upgrade.
> 
> MS also regularly raises the prices on its Office Suites by modifying the
> licenses.  That's why all the unrest at the universities the past few years.
> Loss of concurrency being the single greatest license manipulation maneuver
> used thus far to increase the price.
> 
> As always, MS continues to lie about it while they raping their vict.., er,
> customers.

This is why fair and open competition in the OS marketplace is so
important.  Without, you simply have a monopolist screwing consumers who
are powerless to do anything but choose which  credit card they use.

Read the "Bill Gates" story on browsers.  Even Bill knows he is
powerless as a consumer when a monopolist calls all the shots.

It is worse when they lie about what they do just to fool consumers into
buying more Microsoft products.  That is fraud.  And a whole lot of
Microsoft supporters are either really slow to pick up fraud or they
simply pitch in.

Everyone who argues that IE is free is just joining in with the fraud.

No monopolists spends half a billion on a product unless they know they
can force the sale.


-- 
Lewis A. Mettler, Esq.(Attorney and Software Developer)
lmettler@LAMLaw.com
http://www.lamlaw.com/ (detailed review of the Microsoft antitrust
trial)