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A. Demand Substitutability

1. Server Operating Systems

19. Consumers could not turn from Intel?compatible PC operating systems to Intel? compatible server operating systems without incurring substantial costs, since the latter type of system is sold at a significantly higher price than the former. A consumer intent on acquiring a server operating system would also have to buy a computer of substantially greater power and price than an Intel?compatible PC, because server operating systems generally cannot function properly on PC hardware. The price of an Intel?compatible PC operating system accounts for only a very small percentage of the price of an Intel?compatible PC system. Thus, even a substantial increase in the price of an Intel?compatible PC operating system above the competitive level would result in only a trivial increase in the price of an Intel?compatible PC system. Very few consumers would purchase expensive servers in response to a trivial increase in the price of an Intel?compatible PC system. Furthermore, a consumer would not obtain a satisfactory substitute for an Intel?compatible PC operating system even if he purchased a server, since server operating systems lack the features --- and support for the breadth of applications --- that induce users to purchase Intel?compatible PC operating systems.

2. Non?Intel?Compatible PC Operating Systems

20. Since only Intel?compatible PC operating systems will work with Intel?compatible PCs, a consumer cannot opt for a non?Intel?compatible PC operating system without obtaining a non?Intel?compatible PC. Thus, for consumers who already own an Intel?compatible PC system, the cost of switching to a non?Intel compatible PC operating system includes the price of not only a new operating system, but also a new PC and new peripheral devices. It also includes the effort of learning to use the new system, the cost of acquiring a new set of compatible applications, and the work of replacing files and documents that were associated with the old applications. Very few consumers would incur these costs in response to the trivial increase in the price of an Intel? compatible PC system that would result from even a substantial increase in the price of an Intel? compatible PC operating system. For example, users of Intel?compatible PC operating systems would not switch in large numbers to the Mac OS in response to even a substantial, sustained increase in the price of an Intel?compatible PC operating system.

21. The response to a price increase would be somewhat greater among consumers buying their first PC system, because they would not have already invested time and money in an Intel?compatible PC system and a set of compatible applications. Apple does not license the Mac OS separately from its PC hardware, however, and the package of hardware and software comprising an Apple PC system is priced substantially higher than the average price of an Intel? compatible PC system. Furthermore, consumer demand for Apple PC systems suffers on account of the relative dearth of applications written to run on the Mac OS. It is unlikely, then, that a firm controlling the licensing of all Intel?compatible PC operating systems would lose so many new PC users to Apple as the result of a substantial, enduring price increase as to make the action unprofitable. It is therefore proper to define a relevant market that excludes the Mac OS. In any event, as Section III of these findings demonstrates, including the Mac OS in the relevant market would not alter the Court''s conclusion as to the level of Microsoft''s market power.

3. Information Appliances

22. No operating system designed for a hand?held computer, a ``smart'''' wireless telephone, a television set?top box, or a game console is capable of performing as an adequate operating system for an Intel?compatible PC. Therefore, in order to adopt a substitute for the Intel?compatible PC operating system from the realm of ``information appliances,'''' a consumer must acquire one or more of these devices in lieu of an Intel?compatible PC system.