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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 223.54-2.9%Nov 19 3:59 PM EST
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To: kash johal who wrote (37778)4/30/2001 3:26:02 PM
From: AK2004Read Replies (1) of 275872
 
Kash

I am really surprised at your logic. Intel's profit margin comes from average asp - average cost. Intel was able to sell cheap celerons and maintain profit margin due to more expensive pIII. And, as you know, cost itself is not actual cost but rather an artificial number derived from cost of production and depreciation schedules.

example:
let say intel projects to sell 100 chips and to write off $200 with manufacturing cost of $30 per chip. Let say intel sold 50 chips instead of a 100 then what is the cost per chip?

The point is that intel can pretty much define their own cost and GM. Intel can make cost of p4 less than 1/10 of the cost of celeron if they would really want to and then recognize the losses as one time non-recurring losses couple of years later.

Regards
-Albert
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