RE: volume discounts (was RE: [MLUG - DISCUSSION] AT&T tieredpricing...)

[Jonathan King <EMAIL:PROTECTED>]

On Fri, 2 Aug 2002, Spurling, Shannon wrote:

> Even though I'm talking nominal value, and I do understand that
> inflation is a factor, the cost for them now as opposed to years
> ago is not that big of a difference.

Nominal costs for some stuff can only get so low since you have to 
stock it and ship it and all the boring overhead stuff.  But yeah,
I know what you mean.

> I guess you didn't hear that Microsoft is taking a big hit on
> those systems. They were planning to break even a couple of
> years down the road, and then Nintendo and Sony slashed their
> prices. Microsoft had to follow suit, and is taking a pounding
> because of it. There was an article linked off slashdot a couple
> of months back about that.

I'm not a gamer, so I haven't been paying close attention.  Now, I
thought they were insane to enter that market in the first place,
but maybe it was just a sign of how desperate things were getting
for them.

But seriously, MS now has a way more significant problem, in that
their stock is "only" trading at 24x projected earnings for next
year.  In other words, a dollar of MS earnings is finally believed
to be only worth about what anybody else's earnings are, which means
the market does *not* think they are going to grow like wildfire
anymore which means that last year's whole huge raft of stock
options to replace the ones that gone underwater could *also* be 
underwater, which is not going to help them hire or retain 
employees, and I could go on, but I think you can see where this is
going.

jking

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