Last week you did an interview with analysts Tom Austin and Dave
Smith at the Gartner Symposium at which you talked about
Lindows.com and had some strong comments about our $199 computer.
While we appreciate the exposure, I did want to challenge some of
your answers because I thought they were misleading. Below I've
taken quotes from your talk that I watched from News.com and from
the Gartner website. After each quote, I've added some of my own
thoughts. Feel free to email me with any response you might
First up, the interviewer asked if lowering the cost of
Microsoft software would spur sales of personal computers and open
a whole new market.
Ballmer: 'Would there be a material difference in sales between
a $475 computer and a $500 computer? ...We're not blind to the
issues that you're saying, but we're trying to be smart about it
because I don't think people's gut reaction is right. I don't think
a $475 machine outsells a $500 machine so radically as to be worth
our taking the precipitous action you talk about.'
I think you used a classic 'straw man' argument--where you use
incorrect information to draw a favorable but inaccurate
conclusion. You're probably right that if the price difference were
just $25 then it wouldn't matter all that much, but $25 isn't a
realistic number. Rather than work with a hypothetical, lets look
at actual numbers for a computer outfitted with Microsoft software
versus the identical computer outfitted with LindowsOS. All price
quotes are from Walmart.com as of 10/02..."
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