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Thursday, May 19, 2011

"Big Computer" Made Almost $100 Billion in 2010

The "Big Five" made almost $68 billion in profits last year.  No, not the "Big Five" oil companies that have been in the news lately for making $77 billion last year in profits.  I'm talking about that other "Big Five": Microsoft ($18.7 billion), IBM ($15 billion), Apple ($14 billion), Intel ($11.4 billion) and Hewlett-Packard ($8.8 billion).  And when you add the next five most profitable computer companies - Google ($8.5 billion), Cisco ($7.8 billion), Oracle ($7.7 billion), Dell ($2.63 billion) and Ebay ($1.8 billion) - the "Big Ten" raked in almost $100 billion last year in "windfall" profits last year ($96.1 billion), boosted by strong demand for IT products as the U.S. and global economies recovered from the Great Recession.  

Suppose that Congress next investigated "Big Computer" for earning almost $100 billion in record profits last year, and imposed a higher tax burden on the "Big Ten."  

Q: What would likely happen to computer prices for the "Big Ten's" products; and what would likely happen to "Big Ten" spending on capital equipment and research?  A: Prices would probably be higher and investment spending would probable be lower.  And that's exactly what would likely happen to oil prices and investment spending by the other "Big Five."     

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