Some people think Microsoft should have done less, in order to avoid problems later on.
First, Dvorak says Microsoft’s biggest blunder ever was Internet Explorer, which, thanks to lost lawsuits and antitrust cases, has cost Microsoft billions of dollars and forever saddled it with the “monopoly” label.
All of Microsoft’s Internet-era public-relations and legal problems (in some way or another) stem from Internet Explorer. If you were to put together a comprehensive profit-and-loss statement for IE, there would be a zero in the profits column and billions in the losses columnâ€”billions.
So, the thinking goes: Microsoft can end the bad will by killing off IE. If Microsoft shipped Windows without IE, and with instead a Microsoft-sponsored version of Firefox or Opera (complete with all the defaults they want), they could get back to the business of making software with actual price tags.
Interesting idea, but I doubt it’d ever happen, or even be considered. There’s too much pride at MS to ever cede a market. Has Microsoft ever outright quit a market they once lead in? I can’t think of one. It would be a strange reversal. Plus, Microsoft doesn’t trust others, and it has no way of knowing that the second it started pre-installing Opera, Google or Yahoo wouldn’t buy the little company and thus own a huge piece of Windows.
The only way Microsoft would ever give up on IE is if it bought Opera, and preinstalled that instead.
(via Download Squad)
Next up, GamerDad says that Microsoft made a mistake by charging too little for the Xbox 360.
Folks who looked at $400 as reasonable might have backed off at $500 or more as a list price, especially those that didn’t already have an Xbox at home but did own a PS2. Essentially, by making the price $400 for the Premium Pack (the “real” 360), it was priced low enough to be mass-market right out of the gate. This one simple fact causes all the problems Microsoft experienced at the holiday and even represents the first big mistake of the transition to new consoles. Microsoft cut the generation short unnecessarily because they undercharged for Xbox 360, hurting both their bottom line and everyone else’s at the same time.
Microsoft could have charged more, a lot more, for the Xbox 360. Consoles were going on eBay for more than twice the purchase price, and even recently, people were buying them for $500. Stores nationwide were packaging the 360 in “bundles” that contained $40 of extra value, yet cost $150 more.
In the future, the supply-and-demand model will go to the next level. When a product is in limited supply, like the 360 was and still is, demand will dictate the price. Microsoft will still set a retail price, but buyers will pay whatever they are willing to pay, eBay-style, to get at the limited units available.
Microsoft will do this with the third version of the Xbox, mark my words. They lost a lot of money to greedy (yet smart) retailers and eBayers. Next time around, expect the first wave of Xbox consoles to be sold almost entirely through an auction process, either to the consumer, or to retailers. Either Microsoft will sell the initial supplies directly through an online service, or they will offer up the consoles to whichever retailer is willing to pay the highest price, which will then pass the costs to the consumer.