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Roy Schestowitz <newsgroups@xxxxxxxxxxxxxxx> espoused:
> __/ [ Mark Kent ] on Friday 15 September 2006 08:27 \__
>
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>> Roy Schestowitz <newsgroups@xxxxxxxxxxxxxxx> espoused:
>>> Microsoft Sees Potential in New Markets
>>>
>>> ,----[ Quote ]
>>>| Microsoft has struggled to make money in countries such as China and
>>>| Russia where piracy of its flagship Windows operating system and Office
>>>| business software remains rampant.
>>>|
>>>| Microsoft Vice President Mitch Koch conceded that hardware sales are only
>>>| a small part of Microsoft's overall revenues, which are dominated by
>>>| Windows and Office sales, and that hardware doesn't have the high profit
>>>| margins of established software.
>>>|
>>>| But Koch, who is in charge of Microsoft's worldwide entertainment and
>>>| devices retail sales, said the company's keyboards, mice and other
>>>| computer peripherals are profitable, although it continues to lose money
>>>| on its Xbox 360 videogame consoles.
>>>|
>>>| In July, Microsoft warned that its latest foray into hardware, the Zune
>>>| media player that will be built by Toshiba Corp. to compete against Apple
>>>| Computer Inc.'s iPod, will not be immediately profitable.
>>> `----
>>>
>>> http://biz.yahoo.com/ap/060913/microsoft_hardware.html?.v=6
>>
>> Because of how production costs work, the only way for it to be
>> "immediately profitable" would be for the first ones to cost millions,
>> in order to recoup the millions in development costs... The
>> interesting question is about how many MS need to sell in order to be
>> profitable.
>
> Mass-production may not be an issue, but not every unit that's produce will
> bring in revenue. Don't forget that there are many faulty units out there,
> which not only fail to bring home the bacon, but also shatter reputation
> (Microsoft trie$ hard to hide this) and lead to a considerable drop in
> sales.
Failure rate is a function of quality of machinery, R&D expenditure and
workforce pay/satisfaction and quality of sourced components. You need
to balance those against the cost of replacing faulty units at a given
rate (eg., 5%), and also against the lost sales due to customers
disliking a product if it gets a reputation for being unreliable.
> Speaking of which, Microsoft lowered the price of thre XBox360 due to
> a sinking demand. People anticipate the better, cheaper and more reliable
> consoles whose release date is just around the corner.
Or have they reached a break-point where they can afford to reduce the
price? Without sight of their business plans and real costs &
cash-flows, it's hard to be really sure about what they're doing...
> Best wishes,
>
> Roy
>
> PS - please don't mind the typos. I'm in a hurry today and I have fallen
> behind. I'll catch up with the bottom of the pile this weekend.
No probs
>
> PPS - Growklaw is back into a fully-working order!
>
Excellent!
--
| Mark Kent -- mark at ellandroad dot demon dot co dot uk |
"If people are good only because they fear punishment, and hope for reward,
then we are a sorry lot indeed."
-- Albert Einstein
|
|
