From: discar@nosc.mil (Joe Discar)
Newsgroups: comp.os.os2.advocacy,comp.os.ms-windows.advocacy
Subject: Re: Rude behavior on this group.
Date: 16 Dec 92 01:23:36 GMT
Distribution: world,local
Organization: Naval Ocean Systems Center, San Diego

In article <1992Dec15.183951.23430@mksol.dseg.ti.com> mccall@mksol.dseg.ti.com (fred j mccall 575-3539) writes:
>In <1992Dec15.054239.12858@microsoft.com> richs@microsoft.com (Rick Schaut) writes:
>>Good.  Let's see how much you remember.
>
>More than you've taken, I guess.

I'm beginning to get used to your style....

>
>>I've left the original quote I was responding to to make a distinction
>>between some subtly different statements.  In particular, I was responding
>>to the notion that "the cost gets passed along to the buyer."
>
>So it is your position that vendors will sell at a loss indefinitely
>instead of passing along costs to their customers?
>

I thinkk what's trying to be said is this:


Suppose that a Vendor finds that if he bundles Windows/DOS, more people
come to his door than naught.  Let's say he gets 90 sales, and 10 "no sales
because they didn't want Windows/DOS" at, say, $1000 per system plus $20
per system for Windows (under contract) for a total of $1020.  Let's also
say that his cost for the system is $900, for Windows, is $20.
(note: many vendors do not attempt to make profit out of Windows, but
instead, use it as bait to buy a system).  His net profit is $100 per 
system, or $9000.

So the Vendor unbundles Windows/DOS (and therefore his cost for Windows is
$40 per package).  He now sells 10 systems (to the normally "no-salers"),
and 50 to people who didn't care whether it was installed or no, and
20 to people who wanted it installed for $40.  His profit (discounting
Windows, again) is $8000.  What happened to the other 10 people?  They
went to another store because they WANTED windows and found that the
total cost would be $20 less at another store.

The point?  Fred is right, it DOES cost more to have Windows installed.  But
most vendors don't care if they lose Fred's business, because five other
people PREFER to have a Windows+DOS installed: they want a system they
don't need to configure, format, etc.  In fact, many people ask their
vendors to install their software on the machine before purchase.  People
(most of them) want computers to make life easier for them.  Fred doesn't.

But the vendors only care about the bottom line: bundle DOS+Windows, sign
the contract, and get cheaper software, make bigger profit.

>>>The reasoning about how getting DOS and Windows
>>>even when you don't want it is 'free' is, in my opinion, bogus.  I may
>>>only be paying a few dollars for it but I'm still paying for it.
>
>>Not true.  What you are paying for is other consumers' willingness to pay a
>>higher price for a system with Windows installed.  It's a bit of a subtle
>>point, but it is certainly not a case of vendors "passing the costs on to
>>the buyer" as is the common misconception.

This is a true statement.  

>
>It's a misconception that isn't a misconception.  The 'answer' you
>arrive at all depends on viewpoint.  However, any company that isn't
>passing along its costs isn't going to be in business very long, as
>some simple arithmetic will reveal.
>

Fred is arguing "Viewpoint" now?  Hmmmm, dogs do learn new tricks. :)

>>As for whether or not Windows pre-installed can be considered a "freebie",
>>that depends upon one's point of view.  If you want it, it's considerably
>>cheaper to buy a system with Windows pre-installed than it is to buy a
>>system without Windows, buy Windows seperately and install the software
>>yourself.  For a number of people, this is very much a "freebie".
>
>Not at all.  It's simply allowing them to buy in at a greatly reduced
>price due to volume at their reseller.  This is not 'free', and part
>of those costs are born by people who didn't want it in the first
>place and have to take it.  The individual cost is small (smaller than
>the retail cost of the package by quite a bit -- particularly if
>recently posted comments about an $8 deal are true), but costs that
>must be paid nonetheless.

Fred, this is also a true statement.  But remember that the vendor doesn't
care who's happy: he cares about maximizing his profits.  If that means
bundling Windows+DOS on machines and making a few people upset, so be it.

>
>And you can bet that those costs are 'passed through', or you're
>looking at a vendor who won't be in business very long.
>
>-- 
>"Insisting on perfect safety is for people who don't have the balls to live
> in the real world."   -- Mary Shafer, NASA Ames Dryden
>------------------------------------------------------------------------------
>Fred.McCall@dseg.ti.com - I don't speak for others and they don't speak for me.
Newsgroups: comp.os.os2.advocacy