Some of its rivals are well-known and well- funded companies, such as IBM, Sun and Apple. Microsoft keeps its prices low and keeps imp roving its product-despite its high market share-because,it faces intense competition from firms that would like their products to displace Windows. In 1989, consumers would have had to spend more than $250 (in today’s dollars) to obtain a fraction of the capabilities they get for $50 with Windows98 installed on a new computer. Moreover, just a few years ago consumers,had to spend far more to obtain software that provided just a fraction of the capabilities that Windows offers today. Yet Microsoft’s price for Windows,is a small fraction-less than 5percent-of the price that a true monopolist would charge. ABSTRACT Based solely on market share, Microsoft appears to have a near-monopoly in operating systems for personal computers.
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