Peng-Toh

Note the careful selection of numbers. The enterprise space is still almost all PC. - Piaw Na

Sure, only consumer retail. But this is not a mac-fan site. But if I'm MSFT, I'll be very worried and jealous. More shockingly, the average selling price is way higher even for desktops, so you can't blame netbooks. These numbers parallel the comparison between iPhone revenues/profits and the rest of the manufacturers. Apple is capturing a disproportional revenue and profit share. - Peng-Toh

I don't think MSFT has to be worried. Their Profit Margin is still higher (24% vs. 15%), and their gross profit is still 3X bigger ($45b versus 13b). I think MSFT's far more worried about another Silicon Valley company which is trying to attack the market from the low end, and isn't actively trying to piss off developers. Now, HP, Acer, Asus, etc., and their share holders should be... more... - Piaw Na

In any case, I think there's a lot to be said for Microsoft enabling the democratization of PCs. If all PCs sold were Apple's, no one making $10/hour or less would be able to buy one (no, I don't think Linux is a good solution for those people). And even for those of us who are rich, cheap netbooks is a good thing, and I don't care if that devastates margins on PCs. - Piaw Na

If customers are willing to pay exorbitant prices for my competitor's product in the non-locked-in market, I should look clearly at what's wrong with my product. It is a leading indicator. - Peng-Toh

May be MSFT's board will finally start panicking and doing something about it when MSFT market cap drops below that of AAPL. - Peng-Toh

I think this is the consequence of Microsoft taking essentially all the profits on the software side, and Intel taking essentially all the profits on the hardware side. The manufacturers are essentially assembly shops that aren't adding a lot of value, so it's not surprising that Apple is getting all "profit share." And I don't think boards should worry about market caps --- in the short term, market caps have little to do with the health of the company. They should be worried about long term profits. - Piaw Na

You know that Reed Hastings is now on Microsoft's board, right? I don't think he's the kind of person who panics. - Piaw Na

Intel taking all the profits on the hardware side? Apple computers use Intel too. - Peng-Toh

Didn't know Reed is on the board. Yeah, boards don't worry about market cap except for bragging rights. But they do worry about returns. - Peng-Toh

We always knew that. That's why it took FDR so long to build the middle class. What's surprising is how effective his policies were --- it took 2 generations of Republicans and 40 years (until Reagan) to tear it down. - Piaw Na

The book: http://piaw.blogspot.com/2009... is very much worth reading, btw. - Piaw Na

Were "middle classes" abnormal outside the western world? What about China? Middle east? Roman empire? - Peng-Toh

The Roman empire 's "middle class" was essentially land owners. So was early America. - Piaw Na