Dale, Re: "The reason this seems drastic is that the 2.0 GHz at $562 will be about 4.3 times the cost of the 1.5 GHz at $130. This is almost unprecedented in recent times."
I'd say it may be too soon to make that assumption. Intel has always had a huge price spread. When the 1GHz Pentium III was first released, the price spread was over $700. In earlier times, the price spread was even greater. But it hasn't come to the point, yet, where 0% of the consumers out there would spend the extra $430 to get a 2.0GHz system over a 1.5GHz system. In many cases, people are already doing that. For proof, check out the skus in any retail store. You'll still find Pentium 4 products that have a greater than $400 price spread, and I doubt they are selling at 0%. If vendors can get a decent 2.0GHz system at $1600, which is twice the price of Intel's baseline 1.5GHz system at $800 (thus allowing some headroom for adding a few other features such as larger disk drives and more memory or better graphics), then I'm sure there will still be a number of people interested in buying it. The >$2000 market is may be practically dead, but there is still a lot of life in the $1500-$2000 market.
Of course, I know as well as you that Intel won't sell as many 2.0GHz Pentium 4 chips as they will 1.5GHz chips. The distribution will be a bell curve, with probably 1.7GHz at the sweet spot. Since that speed grade is located at around $190, it's not difficult to imagine an ASP of $200, given the price distribution. Of course, I'm not saying this is definite, and I certainly don't intend to prove to you with numbers just how possible it is, but I have a feeling that the people who actually get paid to perform this level of book-keeping have a much better idea of how much revenue they can yield than you or I.
wanna_bmw |
