Vista’s Price Falls; How Long Before Yahoo’s Price Rises?

Discussion in 'Dell' started by Tony Harding, Mar 2, 2008.

  1. Tony Harding

    Tony Harding Guest

    February 29, 2008, 12:02 pm

    Vista’s Price Falls; How Long Before Yahoo’s Price Rises?

    By Saul Hansell

    If you want to understand Microsoft’s motivation for buying Yahoo, look
    at the price cuts announced today for Windows Vista. (Stay with me on this.)

    The price cuts for boxed copies of Vista are especially big in
    developing countries, where users will be able to buy full versions of
    the operating system for the price they would have paid for an upgrade.
    (The better to prevent piracy, Microsoft says.)

    In the United States, the main difference will be with the Premium
    edition (now $129 instead of $159) and the Ultimate ($219, down from $299).

    Microsoft says the cuts are meant to lift sales in retail stores, a
    small segment of the Windows market. The vast majority of operating
    systems, of course, are sold bundled with computers.

    Microsoft’s many critics are gloating that this shows Vista shipped with
    far more bugs than features.

    No matter how good Vista may be, there is another force at work here:
    The price people are willing to pay for software is coming down.

    A software package — even an operating system — seems out of whack at
    $299 or even $159, when there is so much that can now be done free over
    the Web or through free downloads like iTunes and Google’s Picasa. Those
    prices also don’t really jibe with the cost of personal computers, which
    now start at $500.

    Microsoft itself has already confronted this by creating the “Student
    and Teacher” version of Office. Now you can buy Word, Excel and
    PowerPoint (not Outlook) for $129 (plus whatever guilt you feel as you
    justify the purchase by saying that your spinning class at the gym makes
    you a student).

    One look at Microsoft’s high profit margins certainly raises questions
    about how long this business model can continue before someone creates a
    more efficient model. The combination of the open source movement, the
    Web, and the advertising-supported software model epitomized by Google
    are starting to have the long-predicted effect.

    So while the prices Microsoft can charge for its boxed software may be
    falling, the price it will pay for its own Web software and advertising
    play — Yahoo — is likely to rise.

    Copyright 2007 The New York Times Company
    Tony Harding, Mar 2, 2008
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  2. Tony Harding

    Journey Guest

    I would like to see Apple license its OS. The last time they did it,
    it was with a different hardware architecture. This time it would be
    on Intel PCs. The form factors could stay the same. Heck, I have had
    the Mac OS running on two Dells already. It wasn't running perfectly
    but it shows how close Apple could be to making such a move.

    I don't think it will happen. Apple still is sticking with its
    premium hardware prices. It would require a complete change in
    business model. However, Apple now knows it can create competitive
    hardware, so any decrease in hardware sales could be more than made up
    for if the Mac OS catches on.

    Apple is going international now. In order to grow its business, I
    think it needs to enlist people who want to make a profit in target
    countries. Give them some profit for hardware, let Chinese companies
    design computers for the Mac OS and increase the overall supply.

    It's interesting that the iPhone could bring Apple back to the PDA, a
    space many people thought Apple would never be back in. Nothing's
    unheard of in the second coming of Steve Jobs :) Apple has a chance
    to capitalize on MS's weakness.

    Will they do it? Not likely. MS is feeling the heat, and the next
    version of Windows will probably be stellar.
    Journey, Mar 2, 2008
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  3. Tony Harding

    Tony Harding Guest

    Perhaps, but I/m neither holding my breath nor betting my own money on
    that eventuality. I suspect Jobs is convinced that the current Apple
    business model is just fine.
    Tony Harding, Mar 2, 2008
  4. Tony Harding

    Journey Guest

    I would love to see what it would do to the stock price and see what
    the analysts would say. Some people would want to cut the price in
    half, some would want to double it. It would just be one of those
    rare events that would make life a bit more interesting (um, maybe I
    do need to get out more lol).
    Journey, Mar 2, 2008
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