Sun Tzu,
I'm afraid I don't see that as an option. Free markets understand only three things, supply, demand, and price. One might be able to control any two out of the three, but never all three of them. In other words, a price reduction by producers, "artificial" or not, will cause an increase in quantity demanded. That is how the price of a commodity reaches its production cost; someone decides to lower price in order to increase volume and others will fallow.
Your original post that I responded to presented price as a "reactionary" part of the product:
Back to Rambus...given that DDR is a commodity like other DRAMs, the price drop may be due to: (1) DDR prices are falling due to shrinking demand, as RMBS bulls would postulate. Or (2) DDR prices are falling because of increase in supply, which DDR bulls would believe. The most logical way to settle this is to look at total volume shipments of DDR.
You were saying that prices were rising or falling "due to" a change in supply or demand. The third option I presented was that pricing can also be used as a proactive tool. Changing price can affect the demand, which I believe you've agreed with in your first statement above. So we're in agreement on the three options, I believe (two reactionary, one proactive).
The next question, on which we may agree or disagree, is how elastic the demand is for DDR. Just because someone forces the price of a product down does not mean that volume will increase significantly. Micron's prices decreases are meant to try to increase the demand for DDR, but I'd contend that there are other considerations that still affect the decision (unlike a true commodity product where the individual versions are virtually indistinguishable) to go with DDR. There are alternatives, and dropping the price may still not drive the magnitude increase in demand that Micron is hoping to see. Said another way, Micron's price decreases may cause designers who have already selected DDR to use Micron's DDR (until the other vendor's prices decline as well), but it isn't guaranteed that it will make everyone who has decided to use something else suddenly switch to DDR. It will be one factor in the decision.
Dave
<edit: I just read the froland post before mine. This is an example of one of those "other" factors that are involved in the decision: "Motherboard makers pointed out that the gloomy outlook for the PC market means system manufacturers will not be interested in products based on a new architecture. "> |
