Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 36.26

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3:59 PM EST

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To: John Hull who wrote (142951)	9/6/2001 1:22:54 PM
From: THE WATSONYOUTH	Read Replies (3) of 186894

fundamental assumption error here is that pricing on premium server CPUs has anything to do with cost of production. I agree. They have little to do with cost. My point in all of this is that the assumption that somehow standard high volume Itanium systems have to be far cheaper than correspondingly featured Power4 systems is FALSE. If Intel continues to charge OEMs high prices for Itanium processors, IBM (if it chooses to price accordingly and accept lower margins) will have a distinct advantage. This should be their plan since they can make their money on software and services. I see even the high end boxes as commodities. It would appear that SUN will get killed in such a scenario. They critically depend on hardware margins alone. THE WATSONYOUTH

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