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Technology Stocks : Intel Corporation (INTC)
INTC 38.25+1.1%9:33 AM EST

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To: Steve Porter who wrote (59826)7/12/1998 9:46:00 PM
From: DownSouth  Read Replies (1) of 186894
 
>People buying the cheap PC's aren't usually first time buyers. They are folks who realize that PCs are obsolete the minute you plug them in.

Exactly. So those folks already know that they will be buying a new INTC-based PC very soon. They accelerated the obsolescence of their old PC and expect to trash their sub-1000 even sooner. Therefore the demand curve from existing users is increasing.

>I seem to remember reading in an article that only 10% of sub $1,200 PCs go to first time buyers.

I wonder how many of that 10% would have decided not to make their purchase if the prices were higher? It is pretty much a proven fact that demand increases as prices fall. Therefore the demand curve from new users is increasing.
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