From: hwhalen@jupiter.sun.csd.unb.ca (Hugh Whalen)
Subject: Re: Future of OS/2 and IBM????????????
Organization: Faculty of Administration, University of New Brunswick
Date: Fri, 18 Dec 1992 16:07:25 GMT

In article <1992Dec18.035926.1900@sequent.com> furballs@sequent.com (Paul Penrod) writes:
>In article <1992Dec16.152535.12204@jupiter.sun.csd.unb.ca> hwhalen@jupiter.sun.csd.unb.ca (Hugh Whalen) writes:
>>In article <1992Dec16.072137.28867@sequent.com> furballs@sequent.com (Paul Penrod) writes:
>>>In article <1992Dec15.210437.934@gn.ecn.purdue.edu> ashwath@gn.ecn.purdue.edu (Ashwath Ram) writes:
>>
>>[Stuff about IBM laying off 25,000 people and being stable deleted]
>>
>>>
>>>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.

Well, within a certain range I would have to agree with you. However, 
IBM stock was trading as high as 175 7/8 in 1987. Yesterday it closed 
at 53. During this time (if you were unlucky enough to buy at the 
high) your investment lost $123 per share or 70% of it's value. I 
hardly think that this is irrelevant. During this same period IBM 
dividends were $4.84 per share per year. Thus you would have earned 
only $25 in dividends. As for the dividend stability, I quote from an 
Associated Press article in today's Globe and Mail:

" ..... fell to an 11 year low of $51.87, much of the selling pressure 
coming from investors fearing the loss of the generous dividend of 
$4.84 a year."

Let's summarize this. During a 5 year period stock drops $123 per 
share but you get total dividends of $25 and there is a great fear in 
the marketplace that the dividends might be reduced. Hmmm, still does 
not sound stability or a good deal to me.

 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.
>
[other stuff deleted] 

>>>IBM as a whole than Microsoft. I would not worry about OS/2 support 
>>>suffering. Right now, it's becoming a cash cow for them and they
>>                                       ^^^^^^^^ 
>>

[lots of stuff about how OS/2 is not a cash cow deleted]

>>
>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.
>

Agreed, in fact if you read my entire post I said that they would keep 
selling OS/2 because it was strategic .... this is what I meant by 
strategic. I guess I lapsed into jargon. Sorry if this was not clear. 
Sometimes I forget that I am dealing with mostly technical people 
rather than business people.

>>>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..."
>

Sorry, you lose on this one. We *do* teach it in college. :-)


>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.
>
 
So would I, but the hardware is the cash cow, not the software. After 
all the hardware sells for 10 to 50 times as much as OS/2.

Hugh Whalen                     | Where all men think alike, no one
Faculty of Administration       | thinks very much.
University of New Brunswick     |               - Walter Lippmann			


DISCLAIMER: Neither UNB nor I care what the other thinks.
Newsgroups: comp.os.os2.misc