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Technology Stocks : Intel Corporation (INTC)
INTC 36.91-1.1%Dec 31 3:59 PM EST
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To: Dan3 who wrote (140919)8/6/2001 2:20:49 PM
From: dale_laroy  Read Replies (1) of 186894
 
>If the server market were booming, Intel could (as in the past) sell desktop chips well below minimum profitable prices and make their money on servers.<

Intel has never sold desktop chips below minimum profitable prices, even when they were selling the Celeron versus the K6-2. However, the only way they were able to sell Celeron profitably was to allocate all advertizing costs to the Pentium II promotional budget.

Intel will not be selling P4 processors below their profit level. Intel will be making a profit on their P4 desktop product mix. The question is, as server profits plunge to the point where they can no longer offset the losses in the non-processor business units at Intel, will the slim profits of the desktop processor unit be sufficient to offset the remaining losses in these units?
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