Microsoft cuts prices for Malaysia

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This will INCREASE MS profits

This deal will increase MS profitability, at least in the short run. They will simply be selling product that they would not have otherwise sold, albeit at a lower price. So what if the price is lower? If they are selling additional copies, they will more than make up the "loss."

As for the future, I agree that they will be forced to lower prices across the board. Will this hurt their profits? It is hard to say, but I doubt it. MS is currently suffering from a failure of companies and individuals to upgrade to their newer OSes. By lowering the price, they may well lower their customers' resistance to upgrade. Selling more copies = more profit.

I also agree that the presence of a viable threat from Linux, or any other competing OS, will hasten this reduction in prices. I do seriously doubt, however, that MS stock price will plummet as a result. In fact, I wouldn't be surprised to see their stock, once again, get on its once phenomenal growth curve, as they start to see the benefit of making their product more affordable to the masses (worldwide).

Time will tell.

Posted by: vferrara   Posted on: 03/02/04 You are currently: a Guest | Members login | Terms of Use

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