To view parent comment, click here.
To read all comments associated with this story, please click here.
And just exactly what do Microsoft's production costs have to do with with the CPI? Top of the line PC's cost $10,000 in 1990. With inflation they should cost $25,000 now, right? They cost $1,000 instead. The CPI (inflation measure) is an average of many inflation rates some positive and some negative.
Microsoft's production costs as a percentage of revenue have been dramatically falling over the last 25 years. None of those cost reductions have been passed onto the consumer. In a normal competitive industry (like the PC industry) all of these cost reductions would have been passed on.
In a competitive industry profit margins naturally fall over time. Microsoft's profit margins have been rising with time. Their OEM margins are over 90%. In a normal industry a competitor would say I can live with 70% margins and enter the industry. But in this case they can't.





Member since:
2005-07-06
Have you ever heard of inflation?
If they weer charing $15 for Win 3.1 and $30 now, that's offset easily by the differences in costs (e.g. employees wages that have gone up).