robbie_n
11-26-2002, 08:25 PM
Aggressive pricing competition is normally a good sign that capitalism and the free market are working. Unfortunately, Microsoft has the ability to use the billions of dollars they've taken from consumers and businesses with their illegal monopoly to fend off new competitors, like Lindows.com, making it tough for new companies to gain momentum.
Michael's Minutes (http://www.lindows.com/lindows_michaelsminutes_archives.php?id=39)
Despite my initial scepticism that this was just a slow week, there is actually a peculiar kind of sense to this if you think about it. Excepting WalMart, Most of the vendors who have signed up for the Lindows Builders program so far have been small to medium size OEMs who are wanting to sell both LindowsOS and Windows XP machines. Robertson is clearly aiming his remarks at this market:
This means that the thousands of small to medium size OEMs can obtain sweetheart pricing...
Now, suppose you were a small OEM who measured the difference between a break even and a reasonable profit as selling say 20 more PCs a month, with a profit margin of say $200 per box.
That's $4000.
Remember: each OEM copy of Windows costs about $100 to the consumer; say, $70 to the OEM.
Now, sign up for Lindows' Builder's program for $500, which includes unlimited installations and no-cost access to Michael Robertson's formiddable PR machine.
To recoup that loss of $500, in theory you'd need to sell maybe 3 extra PCs - Lindows or Windows.
BUT, if Robertson is right, the OEM cost of $70 per Windows copy - for all the machines you sell - goes down to say, $40. So those twenty PCs you had to sell to make a profit gives you an extra $600 straight off, making up your Builders' program cost outright and giving you an extra $100. Plus you'd get the same $30 discount per copy on every Windows machine you sold into the bargain.
You can see how this sort of pitch to OEMs would at least raise the level of interest.
Maybe it's not so far fetched after all.... if Robertson is right, at least.
Michael's Minutes (http://www.lindows.com/lindows_michaelsminutes_archives.php?id=39)
Despite my initial scepticism that this was just a slow week, there is actually a peculiar kind of sense to this if you think about it. Excepting WalMart, Most of the vendors who have signed up for the Lindows Builders program so far have been small to medium size OEMs who are wanting to sell both LindowsOS and Windows XP machines. Robertson is clearly aiming his remarks at this market:
This means that the thousands of small to medium size OEMs can obtain sweetheart pricing...
Now, suppose you were a small OEM who measured the difference between a break even and a reasonable profit as selling say 20 more PCs a month, with a profit margin of say $200 per box.
That's $4000.
Remember: each OEM copy of Windows costs about $100 to the consumer; say, $70 to the OEM.
Now, sign up for Lindows' Builder's program for $500, which includes unlimited installations and no-cost access to Michael Robertson's formiddable PR machine.
To recoup that loss of $500, in theory you'd need to sell maybe 3 extra PCs - Lindows or Windows.
BUT, if Robertson is right, the OEM cost of $70 per Windows copy - for all the machines you sell - goes down to say, $40. So those twenty PCs you had to sell to make a profit gives you an extra $600 straight off, making up your Builders' program cost outright and giving you an extra $100. Plus you'd get the same $30 discount per copy on every Windows machine you sold into the bargain.
You can see how this sort of pitch to OEMs would at least raise the level of interest.
Maybe it's not so far fetched after all.... if Robertson is right, at least.