Pete, Re:, "What argument can you make that such severe cuts in P4 prices will not result in a loss either through lower revenue or higher costs for Intel over current status quo?"
Thanks for your response. You provide a wealth of information, but too much for me to want to respond to all at once. But let me concentrate on your one line above.
I believe that the price cuts are justified, as long as Intel can keep a price spread between the various speed grades. As far as I know, the price cuts you mention coincide with the release of a 2.0GHz speed grade in the same $500 price range that the current 1.8GHz Pentium 4 is at now. This is nothing different than what Intel has always done, except that it might seem drastic due to Pentium 4 never having been in high volume before. As I see it, if Intel is successful in getting 1.5GHz through 1.7GHz into the mainstream, and 1.8GHz through 2.0GHz in the high end, then that should provide a Pentium 4 ASP of close to $200. I imagine that's close to what it is now, but the idea is for those skus to outnumber the lower ASP Celerons, and the disappearing Pentium III, thus raising ASPs overall. It's risky, sure, but it can be done. Intel's done it many times before, and they're getting good at it.
"Saying that Intel never makes a mistake and would never do something detrimental to its shareholders is something that was obviously wrong."
I wasn't trying to say that. What I was trying to say is that the numbers you were using in your argument were misleading, and seemingly taken out of thin air. I saw no basis for them, except to show one of a multitude of possibilities. My point is, if you want to make an argument, try sticking to the facts, instead of making up your own.
As for Intel making mistakes, that's a given. There's a definite advantage to taking a risk, and leaving your competitors in the dark. Intel did this with the Pentium Pro, and was very successful. They were the first to break into the RISC server market with an x86 processor. Intel took the risk of forcing PCI on the industry over VESA, and they were fortunate with that decision as well. I think it's fair to say that for most companies, every success is met with a slew of failures. The reason why Intel continues to be valued so high is because they've had a better track record than many other companies.
wanna_bmw |
