Re: Cause and Effect Reversed?

Are sales of the AS/400 slow? 

With the falling computer prices over the last 10 years how many new 
AS/400 customers do you have to add every 18 months just to stand still? 
Isn't Moore's Law in effect for the AS/400 world too.

Besides, I've heard rumors of overtime on the AS/400 assembly line?


_______________________
Booth Martin
Booth@MartinVT.com
http://www.MartinVT.com
_______________________




"Leif Svalgaard" <leif@leif.org>
Sent by: owner-midrange-l@midrange.com
09/29/2000 01:03 PM
Please respond to MIDRANGE-L

 
        To:     <MIDRANGE-L@midrange.com>
        cc: 
        Subject:        Re: Cause and Effect Reversed?

From: Shaw, David <dshaw@spartan.com>
> Pete is clearly stating the classical price-setting algorithm that
marketing
> folks in any industry are taught to use>
>That doesn't invalidate the algorithm.  In
> fact, from an economic perspective a prediction of micro-economic theory 
is
> that even if this algorithm isn't used explicitly in a market, prices 
and
> unit quantities sold will still tend to approach the values suggested by
the
> algorithm - that's the effect of entities which seek to maximize their
> profits competing in a market.

I don't think the algorithm is invalid, just that it is not applicable.
The duplication cost for software is essentially zero ($0.25 per CD).
I don't think MicroSoft uses the algorithm in pricing MS-Word, or
Windows, or anything else. The Linux people certainly don't.
It is time to get back to the original problem: Can we by lowering
the unit price on software (OS/400) increase the sales of AS/400
hardware. I think so. I think that the AS/400 is overpriced (most
of that is software - at least compared to Linux or NT) and that
that partly (apart from lousy marketing) is the reason for the
slow sales. Do you have a problem with that?


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