ParisLemon — Below the Surface

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See, that’s what the app is perfect for.

Sounds perfect Wahhhh, I don’t wanna

Horace Dediu, noting that Microsoft’s major problem going forward isn’t necessarily that Windows 8 is a dog, it’s that the entire economic structure of the computing market is changing:

The economics of tablets imply a “commoditization” of system and application software. So what’s Microsoft to do?

The answer is Surface where the software margin is captured in hardware. This explains the pricing of Surface. The price isn’t significantly below what Apple charges because Microsoft wants to capture a comparable (30%+) margin. On a $500 product that amounts to $150. After subtracting hardware operating and distribution costs we can get pretty close to the $120 it currently obtains from a PC.

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