Re: two different price "penalties" for drdram, initially...
I think that whoever quoted $250 cost difference and $100 to $150 retail price difference had it backwards. There shouldn't be any difference in installation costs, and the PC business is so competitive that it would be tough for a box builder to pay such a large subsidy - I suppose Intel could afford such a subsidy, but it wouldn't look good if word of such actions (and their implied necessity) leaked out - could happen though.
What I've read and seen indicated a parts cost penalty of $125 to $200 per machine for a machine with 128 meg of RAM. Even though gross margins on PCs are lower than most consumer goods, this should still result in a retail price differential of $188 to $300, assuming a total markup of 33%, instead of the more usual 40-50%. (note that in retail, percentage markup is based upon sales price, the more intuitive percentage increase over cost is called "markon"). Given the anticipated large demand for a limited supply of Rambus, this difference would probably be much closer to the $300 figure in the marketplace, it might be more.
Recent events may reduce that difference, at least temporarily. Intel has announced that it will reduce it's production of Rambus supporting chipsets from the planned 20% to 5%. If Intel has half the chipset market, (I think it was more than that until recently, but then problems with the 810 caused board makers to reject it, and BX production had already been reduced so that VIA, SIS, and ALI all saw their share of the market grow). So this would leave 2.5% of PC units being produced starting at some point in Q4 of 99 capable of using Rambus. Since these are going to be high end PC's, I'd guess they will, on average, use double the memory of the market average, so that leaves a maximum RAM market demand for Rambus of 5% (since some of the rambus capable PCs will use SDRAM, it will be less than that). Intel has worked pretty hard to prime the rambus pump, so there should be less of a supply/demand imbalance if the unit market is kept capped at 2.5% and most of the memory houses that have initiated production follow through.
So we could easily see a situation where Rambus prices are kept closer to that $188 difference, maybe even less if most of the companies that have announced production plans are able to execute on them, and Intel keeps production of Rambus capable chipsets restricted. Of course, if retail prices of Rambus are kept as low as 50% more than other SDRAM, which is less than the production cost differential right now, some of those producers may elect to not execute on their production plans.
Just one opinion, hope at least part of it makes sense to you.
Dan |
