Re: If Intel can sell its chips for $400 less a $70 rebate....
As long as they are selling them for $400, $70 is no big deal. But, going by the prices charged by Dell, Compaq, etc., Intel receives between half and 2/3 of the list price for its chips (sometimes less). So if a P4 is listed at $500, sells for $250, cost $100 to make, and requires a $60 rebate, Intel makes $90 on the chip. On the equivalent P3 they were selling this summer, they made $225. If the chip carries a list price of $350, and sells to OEMs for $175, they barely break even.
AMD can sell a GHZ+ Athlon at $300 list, $150 cost to OEMs, and make $120 on the chip. Calculate past ASPs x processors sold and subtract profits to get minimum required ASPs. AMD needs average profits of $40 per chip to make any money. Intel needs average profits of $120 per chip to make any money.
That's the kind of difference that can force changes to marketing plans, and force Intel to let AMD sell a few chips, whether Intel like it or not.
Regards,
Dan |
