Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: A. A. LaFountain III who wrote (58611)	7/27/1999 5:45:00 PM
From: RDM	Read Replies (2) of 1580831

<couldn't the Celeron line have gross margins of about 55-60%, PII/III about 65-70% and Xeon about 75-80%? Even if these numbers are not exact, the concept shouldn't be too far off> I think is interest to put pencil to the paper and check your hypothesis with some numbers. Applying your margins to my estimated ASPs yields the following costs: Xeon: 25% of $1500 is $375 PIII: 35% of $250 is $80 Celeron: 45% of $75 is $35 To many on this thread, the estimated cost of the Xeon looks high even considering the special cache and the cost of the PIII looks high while the Celeron cost may look reasonable and possibly low so as to create an honest difference of opinion regarding your statement that "But the notion of the high-end making all the money and the low end losing it seems unlikely". I am of the belief that the central issue is one of allocation of overhead and research expenses which is ultimately as much political as it is legal and therefore difficult to ascertain ahead of time.

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