On Sat, 2008-02-02 at 15:34 +0000, Jon Grant wrote: > Hi Ian, > > [...] > > prices are unsustainable) and as more things move to be web based it's > > less inconvenient to change from a Windows desktop. This has already > > forced MS to reduce the price of OEM Windows for these devices. Reducing > > the price will delay change but it won't in the end stop it as > > I think one risk is that MS drops their price to something small like > £3 (OEM's only pay around £15 for XP I heard)
No. unless its some deal like Dell on a huge scale who I believe get discounts effectively from commissions on sales. or perhaps on laptops. We are an OEM supplier of Windows computers and we pay around £70 like all other small systems builders although they have given a special price for the EEEPC of about half that. This is significant. AFAIK it's the first time any discounts have been given for OEM Windows - education discounts are all for upgrades not OEM. A good guide is look at the lowest cost laptops and then the price of a EEEPC. The difference is software cost and a hard drive which is about £20. Selective discounts can only ever be an interim step because a supplier that sells both EEEPC and Windows machines could buy at a discount for the Linux machines and then put the software on the others to gain competitive advantage or indeed sell on to other OEMs undercutting M$. Since around 30-40% of M$'s profitability is selling Windows, if the price falls from £70 an OEM to £3 its going to have a very significant effect. Initially, paradoxically more people might actually get legal so difficult to be sure what the effect would be overall. Also EEEPC is only the first. We will be selling the ink-media Ubuntu based machine that is the same price but with a bigger 10" screen. Once there is an obvious market, watch Dell, Lenovo and everyone dive in. All these will also come with OpenOffice.org so that is another 40% of M$'s profitability under threat especially if their OOXML ISO bid fails. > charge, MS still make > enough profit to do their business, and people stick with it as > practically it does work well for many people and at that price point > its easy for the price difference to not be a consideration. The thing is that MS shareholders expect increasing profits and growth - that is what share prices are dependent on. So while the company has too much cash to go bust, a significant drop in revenue and/or market share from Windows and/or Office will have a noticeable impact even if only because shareholders will switch their money. Watch out for profit warnings in the next two or three years :-) Ian -- New QCA Accredited IT Qualifications www.theINGOTs.org You have received this email from the following company: The Learning Machine Limited, Reg Office, 36 Ashby Road, Tamworth, Staffordshire, B79 8AQ. Reg No: 05560797, Registered in England and Wales. _______________________________________________ Fsfe-uk mailing list [email protected] http://lists.gnu.org/mailman/listinfo/fsfe-uk
