It was this business model, not Apple's restrictive rival, that accelerated the rise of a mass market for personal computers. There is a certain irony that Microsoft's model, which created more opportunities for hardware companies and other software firms, is now under antitrust assault. The paradox, then, is that Microsoft seems to possess and to exercise monopoly power, but not to enjoy the presumed benefits of higher prices and less innovation. The most important reason is the nature of Microsoft's market. During the explosive phase, prices usually drop sharply.
Companies discover lower-cost methods of production.
Lower costs in turn expand the market, and higher sales decrease unit costs. If your car wears out, you buy a new one. If you like a new restaurant, you go back. For personal computers, the 1980s and the 1990s were the period of explosive growth. The expectation was that, like Henry Ford and the Model T, profits would come more from volume than from price.