Elmer, you better re-sharpen your pencil. MG&A (mostly marketing) cost per CPU at Intel is $46, if you assume they sold 25M this quarter. By contrast, in Q4, AMD's MG&A cost per CPU was $20. I'm sure Intel has lower "General and Administrative" overhead per CPU than AMD, so at least $32 per CPU is pure marketing costs. I'll discount that by 25% since Celerons get a little less direct marketing.
Intel will spend $7.5 billion for CapEx this year. If we just allocate 9% of that to Celerons and assume 40M Celerons for 2001 (1/3 of total CPU units), the CapEx per Celeron is $17. Alternatively, take 1/6th of 2001 depreciation (4.1B) and divide by number of Celerons.
But even just using basic "COST OF SALES" -- raw material, labor, mfg costs etc., includes depreciation, so we will subtract it out --
Q1 COS = $3,225M minus deprec=$934 = $2,291 divided by 33.7M CPU's Q1 (based on 21.2% AMD market share at 7.3M CPU's) = $67.98 per CPU
I'll be generous and reduce this by 30% to account for mfg costs of Intel's non-CPU businesses (although they only contribute 23% of sales
That leaves a basic manufacturing cost of $47.59 per CPU. Let's say Celerons are 1/3 cheaper to make than your average, run of the mill Intel CPU, that leaves $32 per CPU for just the basic mfg costs
$32 - basic mfg cost
$24 - marketing cost per CPU (but not including "General and Administrative")
$17 - Cap Ex per Celeron (you get similar number by taking 1/6 of depreciation)
--------
$73
Now, take a look here: pricewatch.com
......................................Intel Loss/CPU assuming
......................................10% disti profit margin
$82 - Celeron 850......---- ($1 profit!)
$65 - Celeron 800......$14 loss
$57 - Celeron 766......$22 loss
$56 - Celeron 733......$23 loss
$48 - Celeron 700......$30 loss
$45 - Celeron 667......$33 loss
$39 - Celeron 633......$38 loss
Petz |
