Record Microsoft Revenues as Company Sells 60 Million Copies of Windows 7 in Quarter

Windows 7 Fails to Boost Profits of PC Makers

http://online.wsj.com/article/SB10001424052748704343104575034233214601248.html?mod=WSJ_Tech_LEADSecond

Thus, the Microsoft Tax.

Microsoft has done nothing to lower the cost of the PC. The OEMs are the ones who deserve the credit for low cost PCS. Windows is fast becoming the most expensive component of a PC.

@Subzero

How do I explain that Ars story? Easy it was based on the same sales estimates that you and Paul got so excited about and those estimates turned out to be wrong.

I am not sure what the bootcamp article has to do with anything. Apple updated a feature.... Shocking!

Apple continues to gain market share. Are there companies that sell more computers? Sure there are. I made no claim that there weren't.

Your claims that Apple is going to stagnate due to price or that prices seem to have cause them to lose sales are not backed up by any data.

Last quarter Apple's CPU sales were up 30% without any price reduction. Last quarter Apple's market share when up without any sort of price reduction. Apple's sales are not hurting and there is no reason to think they are.

You seem to think my comments are some sort of anti MS or anti Windows thing. They aren't. I think it is great MS had such a great quarter.

My comments are about your lack of fact in your assertions.

As you said "the numbers are in" and the numbers show that neither Apple's CPU nor market share growth is not slowing.

ModernDislocation said:

ahh subzero -

Remember a few weeks ago when you and Paul were all excited about Mac sales "faltering" you let lose with this gem:

"The numbers are in. Apple's high prices are coming back to haunt them again!"

Or this one

"Apple must compete on lower end, or face stagnation."

But unlike what you really wanted to believe the numbers were not in and when they did actually come out and Apple's CPU growth was at 30% and they grew global market share.

Ahhh good times, good times.

And now you are citing a Hollywood production as some kind of proof of your point.

You have no credibility.

ModernDislocation,

Really? Step away from the iKool Aid for a minute. Let's step out of the Jobs Reality Distortion Field. Let me point this out to you, since obviously my point didn't get through to you. The iPad's opening price is $499. Very interesting. That's the price of a high end net-book. That's also the price of the average laptop. So Apple IS CATERING TO THE LOWER END! Why else would Apple place such a "superior" product at such a low price?

Why else would you build such an obviously underpowered device compared to Apple's Mac Mini, Macbook, iMacs, and Mac Pro's? Because Apple is being outsold here in the U.S. and worldwide by huge margins. Greed is a factor those Apple execs are immune too. They desperately want to play to that mass market crowd. Thanks for reminding me about that quote. The iPad justifies my comments about Apple's need to compete against the lower end. The 60+ million sold Windows 7 sales are also proof of this as well. With Windows 7 now Apple and Microsoft are at parity. Everyone from Leo Laporte to Walt Mossberg are all saying so.

Or else how do you explain this story?

http://arstechnica.com/hardware/news/2010/01/while-pc-market-rebounds-apple-slips-into-5th-place-in-us.ars

Or this one?

http://www.macworld.com/article/145789/2010/01/bootcamp_win7.html

You are the one who Dislocated from reality. But thanks for playing.

Microsoft sells software -- of course their margins are huge. The bigger the blockbuster release, the higher their margins. If they have a flop, the huge fixed R&D cost is amortized over a much smaller group, hence a money loss.

Windows 7 is huge, thus their margins are going to be sky high. But, you can't forget the Windows 7 R&D budget was in the multiple billions. However, that *cost* is amortized over hundreds of millions of users, so, in context it costs MS very little to develop on a per user basis, and the prices charged are essentially static.

Conversely, for the mac-faithful, you pay vastly more for your OS. Apple's R&D costs are in their annual report, they are also in the billions for Mac OS, but they have vastly fewer users to amortize that cost against. They don't charge it in the form of upgrades, but you can bet that $400-700 of that shiny new 17" Macbook Pro is covering OS development.

Since Apple controls the entire chain -- the higher priced computers include a larger percentage towards R&D. Thus it's really progressive OS "taxation" when you buy into their more costly machines.

It's actually very easy to figure out the approximate "OS tax" for any given product on a machine. The component costs are known. If you remove the margin, then you know the actual "burden" to the company. Subtract out known BOM costs, and then you're left with incidentals that happen to be the OS and bundled software costs.

@Lokitoth.

Thanks for linking that.

I'm not referring to retail, so much as OEM companies like HP, Acer & Dell. The incentives for Microsoft and the OEMs are not really aligned.

Since Microsoft gets paid the same no matter what the selling price is of a computer, they are the only ones benefitting from the ever shrinking average selling price. So while netbooks sales and sub $500 PCs are selling very well, it is Microsoft, not the OEMs who are profiting from this. The OEMs are the ones who are bringing down the cost of the PC, not Microsoft. Since Windows 7 costs more then XP or Vista, they are actually raising the cost to the consumer.

http://www.liliputing.com/2009/08/windows-7-starter-edition-to-cost-more-than-windows-xp-for-netbooks.html