NetNews Usenet Archive 1992 #31/NN_1992_31.iso/spool/comp/os/os2/advocacy/11301

Internet Message Format | 1992-12-31 | 3.8 KB

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Path: sparky!uunet!elroy.jpl.nasa.gov!ames!olivea!sgigate!odin!mips!vermont.mti.sgi.com!jackc
From: [e-mail] (Jack Choquette)
Newsgroups: comp.os.os2.advocacy,comp.os.ms-windows.advocacy
Subject: Re: Is Microsoft the next Standard Oil?
Message-ID: <[e-mail]>
Date: 31 Dec 92 19:22:32 GMT
References: <[e-mail]> <[e-mail]> <[e-mail]> <[e-mail]>
Organization: Silicon Graphics, Inc.
Lines: 64
NNTP-Posting-Host: vermont.mti.sgi.com

In article <[e-mail]>, [e-mail] (Bruce Dubbs) writes:
|> In article <[e-mail]> [e-mail] (Phil Lafornara) writes:
|> |In article <[e-mail]> [e-mail] (Bruce Dubbs) writes:
|> |>
|> |>Actually, I wasn't talking about Standard Oil, I was talking about MS.
|> |>The cost of duplicating software is negligible.  The cost of
|> |>developing is high.  If one company has deep pockets and no controls,
|> |>the potential exists for that company to dump the product (software) for a
|> |>period of time until the competitor goes out of business and then
|> |>raise the prices again.
|> |>
|> |>Has MS done this?  You bet.  How much was OS/2 1.0?  Answer: $325.
|> |>Why so much?  No competition.  How much was the original OS/2 PDK?
|> |>Answer: $2600.  Same reason.  Did IBM go along? Yup. They were
|> |>partners, not competitors then.
|> |
|> |    OK, I give up.  Which of the examples above is an example
|> |of the underpricing you describe in your first paragraph?
|> |
|>
|> Come on Phil.  You know better than that.  Are you saying that if
|> OS/2, NextStep, etc goes away through superior marketing (or other
|> tactics) that MS will not raise the prices?
|>
|> I was describing what DID happen without effective competition.  And
|> what I feel will happen again without ongoing competition.
|> --
|> Bruce Dubbs                   |  Oxymorons of note:
|> [e-mail]        |  Honest Politician, Political Science,
|>                               |  Scrupulous Lawyer


I have to point something out here.  Twice someone has asked how the OS/2
example is an example of underpricing.  Both times you answered that they
did not understand what you said and attacted them for being so blind to
obvious validity of your viewpoints.

I don't think you understand what you've written.  In the first paragraph
you describe how business undercuts a compeditor and then raises prices.
You then go on to say that the high price for OS/2 is an example of MS
doing it (underpricing and then raising prices).

OS/2 may be an example of overpricing, I am not questioning that.  But it
is NOT an example of underpricing to eliminate competitors and then raising
prices.

I must also point out that I'm not attacking (or supporting) your viewpoints.
I'm just pointing out that this one point appears to be incorrect or unclear
and maybe you should clarify it.  Phil did this, in a tongue and cheek sort
of way, and you attacted him.  Please don't attact me, just clarify your
point or admit what you said is incorrect or stated incorrectly.

Also, please don't say this is a minor point.  Overpricing a new product
is much different then underpricing and then raising prices.  Overpricing
a NEW product (and an example of it) does not support your position, at
least in the way you've explained your position.  Overpricing a NEW product is
the fastest way to kill the product and is not a very good business practice.

I may be wrong about overpricing a NEW product being bad for the company doing
the overpricing.  If I am, please explain how.  Otherwise please use another
example.  Maybe you can use the example of companies in Japan dumping
memory chips.

/jack