Weakness in Strength

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Date: Tuesday, October 22nd, 2002, 09:00
Category: Archive

As a result of its unpopular new licensing scheme Microsoft doubled its profits in the third quarter – in an industry drowning in red ink. Can you say monopoly? Apple’s switch campaign could not be better timed. Open source programming just got a shot in the arm. Linux and Mac OS X have an opportunity to exploit. More important than Windows, however is Microsoft’s huge cash cow – Office. This is mature software and each upgrade provides little more than bloat. Microsoft wants to continue making a huge profit with little investment in this particular product. The big question is whether customers will continue to shell out in this weak economy. Open Office could open the floodgates in the next few years. Rumors that a new version of Appleworks will be more on a par with Office and will save files in Office format abound. If one or two percent of Windows users switch, Apple will benefit tremendously. If a larger percentage of Office users opt out, Microsoft will be hit very hard and will need to squeeze its customers more on the OS side. Even OS X server has an opportunity here with its inexpensive licensing, and could start to contribute in a meaningful way to Apple hardware sales.

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