From: rsrodger@wam.umd.edu (Yamanari)
Subject: Re: Future of OS/2 and IBM????????????
Organization: University of Maryland, College Park
Date: Fri, 18 Dec 1992 13:04:26 GMT

In article <1992Dec18.035926.1900@sequent.com> furballs@sequent.com (Paul Penrod) writes:
>>Ahem .... stable? I believe that around 1987 IBM stock was trading at 
>>approximately $178 per share. Yesterday it was trading at $56 per 
>>share. God help us if this is stability. :) 
>>
>
>Yes, stable. You obviously don't play the stock market with
>professional investors or you would realize that stock price is not
>relavent, unless you are going short term. DIVIDENDS are the
>stability. And, IBM earned it's BLUE CHIP status by producing
>DIVIDENDS that are, up till now, consistently better than the
>average.


	Not true.  IBM has performed extremely poorly since I bought
	at $169.  Not only has the value of the stock dropped to less than
	half it's original value (what's it at now, $58?.. I don't even
	*check* anymore--just wait for the glossy propaganda they call
	a stockholders report), but the dividends have, in general,m
	been pretty lousy.  Even if you totalled all of the money 
	from the dividends over the lifetime of the stock, it comes
	nowhere *near* recouping the loss due to the drop in value. 
	In fact, as dividends go, it's at the bottom--below every 
	utility but one (the one that got sued).


>>Cash cow? I don't think so. The most optimistic numbers I've heard are 
>>2 million units sold. Lots went out at what ....$49. Others have gone 
>>to retail outlets and since the retail outlets have to make a profit 
>>the full price of these units did not go to IBM. Subtract costs for 
>>disks, manuals, suppport!!!!, bug fixes!!!!, shipping, order taking, 
>>advertising, beta testing, etc. and there is no way that this product 
>>*at this time* is a cash cow. If IBM got an average of $50 per unit 
>>sold then they received at most $100,000,000  from OS/2 sales. This is 
>>not much in a company that has over $50,000,000,000 in sales. It is at 
>>most .2% of their sales.
>>
>Think again. IBM makes a large portion of it's money on hardware
>and service. They could give away the OS for all intents and
>purposes, so long as they get the service contracts and sell
>hardware. That's why their called International Business MACHINES.

	Think again.  He;s right--OS/2 is not something that's
	making them much in the way of profits, or anything at all.
	You responded with a, "IBM makes a large portion of it's
	money on hardware and service"--which is irrelavent to the
	point.  IBM is not making much on OS/2.


>>>have announced plans to integrate it into their other system
>>>platform. As long as people continue to buy OS/2, IBM will continue
>>>to promote it's growth and useability.
>>
>>Maybe, in fact, probably .... but more as a matter of strategy and ego 
>>rather than the dubious fact that it's a cash cow.
>>
>
>Old marketing strategy they never teach in college:
>
>"I'll give you the razor, so long as I can sell you the blades..."


	Sounds like MicroSoft, not IBM.  IBM sells you the house,
	but nothing to decorate it with.

	I wont comment on which strategy is more moral, but I
	think everyone here can tell you which one is the more
	effective method of turning a miniscule company into the
	largest software company in the world.


>One last thing. According to the sattelite news service, IBM is
>having problems producing enough OS/2 packages to sell and bundle
>with their PS/2 hardware, which is selling a record clip. Yes, I
>would call that a cash cow.


	Ok, lots of packages at little profit.  Hardly a cash cow.

>--------------------------------------------------------------------
>            Bureaucracy: noun, plural - Bureaucracies.
>         The process of turning energy into solid waste.
>---------------------------------------------------------------------


-- 
	"If you can't eat sand, why the hell are you living in a desert?"

	     Rule 1:  "Don't have more children than you can feed."
	  	  Nuclear redevelopment for a better world!