On 10/16/2011 1:38 PM, Ed Pawlowski wrote:
Jack wrote:
I'm OK with the 10% Exxon-Mobil makes. I get edgy at 40% that Apple
makes, but that doesn't bother me too much because I don't think they
have a monopoly. I'm not OK with a 30% profit that a monopoly (90+% of
the DT market) makes, particularly when the product stinks.
A perfect example of why monopolies are bad business.
I don't have a problem with 40% if they can get it. We have the
option of saying "NO" and not using the product. After all, while it
is a nice product, we lived on earth for thousands of years without
any type of phone.
Most monopolies are temporary.
Perhaps, depending on your definition of temporary. Microsoft has been
at it of a quarter century. Standard Oil, IBM, AT&T had to be broken up
by the courts. The reason monopolies like MS are bad is by definition,
competition is excluded via control of the market. When competition is
stifled by a monopoly, progress stops, quality stagnates and people are
forced to pay what the monopoly says they will pay. MS is a perfect
example of this, providing crap at a 30% mark up to over 90% of the
market.
Just when do you think this "temporary" control will end?
If they are hugely profitable,
competition soon goes for a share of the market and they usually go
for it at a lower price.
Apple may or may not have a great product, I don't own or use anything
of theirs, but my son has a Mac and an iPhone, and he likes them, and
the mac runs on a Unix kernel so it should be solid. I'm not sure how
they manage a 40% profit margin but I'm not a big fan of companies
making that much of a profit margin. As you say, in this case, it may
be temporary, who knows. I doubt Apple can put a retailer out of the
computer business if they sell a competitors product, like MS could when
obtaining monopoly status.
I suspect the few people willing to swim up stream against the MS
monopoly are willing to pay exorbitant prices, so even Apple customers
are a casualty if the MS monopoly.
--
Jack
Add Life to your Days not Days to your Life.
http://jbstein.com