Lets say that PC price wars are beginning (hypothetically speaking, of course). That means that with all of the different PC makers, profit margins will decrease (due to the intense competition). Intel, will not be affected at all from this. Margins will continue to remain high because Intel itself has little competition. CYRX, and AMD/NXGN are the only ones who can hurt INTC, not the PC makers and their discounting!
So unless CYRX and AMD/NXGN can actually make good products, and more importantly, get their products to market on time (for once), Intel's profit margins should remain stable (adjusted however, due to their increase in low-profit-margin motherboard sales). And even if Intel's competitors get competitve, Andy Grove says he has no problems with agressive Pentium price cutting to destory Intel competitors (Wall Street may not like that, but it definately helps Intel in the long run).
Thus, the only thing that can stop Intel is slower PC demand (which isn't very likely for at least this Christmas, contrary to what analysts say). Not price cuts in PCs by their makers! |
