At 08:29 PM 3/5/2003 +0300, you wrote: >Sorry Paul, but this doesn't sound right. One cannot literally "lose on >every such sale" of software, unless the price was lower than that of a >bunch of empty floppies (wholesale). Of course, they could lose money >on the product, but not like this, and that'd be a completely different >story.
Here's how Lotus lost money; I'm making up the numbers, so just pay attention to the way it worked: Lotus needed $300 million to recover its development and marketing costs. Lotus expected to sell the package to newcomers for $200. Lotus offered the package to Borland users as a "sidegrade" for $80. Lotus expected to sell 200,000 packages at $80, 2 million packages at $200. Total: $16 million + $400 million = $416 million. Instead, Lotus sold 800,000 packages at $80, and only 1.4 million at $200. Total: $6.4 million + $280 million = $286.4 million.
