Rambus (RMBS) - Eagle or Penguin Message Board

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Technology Stocks : Rambus (RMBS) - Eagle or Penguin

RMBS 94.26

-11.1%

Dec 12 3:59 PM EST

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To: Dave B who wrote (73593)	5/25/2001 9:06:35 AM
From: Sun Tzu	of 93625

Your original post that I responded to presented price as a "reactionary" part of the product... Thanks. Now I see your point. So now we are debating the sequence of events. I think that the change is almost instantenious which makes the question moot. In other words, the question in Micron's mind is something like "I can sell X DDR at $Y or I can sell X+Z DDR at $Y-W". The real question, as you have pointed to, is price-elasticity. I suspect the kind of info we need to analyze this is not easily available. But the in principle, the more elastic the demand, the faster the drop towards cost of production. Another reason for the price reduction may not be the actual profits at the moment, but rather strategic moves to destroy some competitors or to put pressure on RDRAM production. If you find any info on the elasticity or worldwide production numbers, I am all ears. ST

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