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Is Microsoft a Monopoly - Research Paper Example

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It began operations in 1975 and since its inception it has gone on to become a giant in the operating systems (OS) industry for laptops and desktop PCs. It…
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Is Microsoft a Monopoly
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Download file to see previous pages Before drawing any conclusions about Microsoft being a monopoly, we must first understand what a monopoly really is. A pure monopoly exists when there is a single supplier (Grant). In another definition monopoly is defined as the only supplier of a good for which there are no close substitutes (Perloff). From the above two definitions of monopoly it is safe to assume two characteristics that a firm must possess to be called a monopoly:
1. Sole supplier: variations may exist regarding the context of the sole supplier. In case of a pure monopoly there will be only one firm in the industry, meaning that the firm is the industry. It can also mean that there is one major firm with nearly the whole market power and other small firms have negligible share of the market that they can be ignored.
Based on the two definitions I believe that Microsoft is not a monopoly. Firstly we must establish the industry, before labeling Microsoft a monopoly. If we consider the software industry then Microsoft is definitely not a monopoly. The software industry is huge with a diverse range of software ranging from OS software in which Microsoft holds a considerable market share to medical software where Microsoft has no market share. The fact is that before classifying a firm’s position in the industry first the industry needs to be defined.
If we consider the first attribute then Microsoft is not the single supplier even in the OS industry, where it holds considerable market share. It faces competition from Android OS for tablet computers, Linux, Oracle, Xerox, DEC, Psion, Apple’s OS which is found in most Apple machines, and iOS, Apple’s OS for iPad and iPhones. There are some other OS that are developed on little known platforms, some of the most notable of these OS are: Haiku for IA-32 platform, RISC OS for ARM platform, MorphOS for Pegasos, EFIKA and Amiga platforms. Although these OS are in the market, Microsoft is the industry ...Download file to see next pages Read More
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