This blog contains posts and comments written by students in Dr. Tufte's economics classes at Southern Utah University.
9/26/2005
Rivals partner up
Palm, Inc. just announced a version of its Treo smartphone that runs Microsoft software. These two rival companies have created a partnership in hopes that Palm will be able to reach new customers. The article states that the phone will be available through Verizon Wireless early next year. This seems like a pretty good move on Palm's part. Their earnings have dropped in the last few months, and I think by partnering with Microsoft they will have the ability to largely increase their technology. This is also a good move on Microsoft's part because they will also be able to expand their technology. I think this partnership will be beneficial in the long run for both sides.
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3 comments:
-1 (waived for this block) because the link doesn't go to a publically available site. In the future, find a link that is free!
There's some simple economics here. Palm wanted Microsoft's software, and Microsoft wanted access to Palm's hardware because they are complements or substitutes?
Dr. Tufte posed a question to make us think: “Palm wanted Microsoft's software, and Microsoft wanted access to Palm's hardware because they are complements or substitutes?”
I believe that these two companies may have been substitutes before, when they were rivals. However, because of how they are positioning themselves now for this product, they are complements. It's possible for a company to be both a substitute or a complement, depending on how they align all of their products. In this situation with this product, when you buy Palm's hardware, you also buy Microsoft's software, and vice-versa.
This is why in the MBA class I am always using the phrase "along this dimension". It fits perfectly with "It's possible for a company to be both a substitute or a complement, depending on how they align all of their products."
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