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Technology Stocks : Intel Corporation (INTC)

INTC 37.48

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2:37 PM EST

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To: Tenchusatsu who wrote (143192)	9/10/2001 12:45:04 AM
From: THE WATSONYOUTH	Read Replies (1) of 186894

It's the same reason why an 8-way Xeon system from HP (or Dell, or Compaq, or whomever) will cost less. Itanium will be higher volume than POWER4. Well if Intel charges OEMs $1.5K for Itanium chips in volume, what do you think it costs IBM to produce Power4 chips. If it is less than $1.5K, then just where does this cost advantage lie? In the chipsets? Intel marks them up as well. If IBM wants to compete on a cost basis... they can, especially if they know they will get sufficient income from softeware/middleware/ and services on those accounts. In such a scenario, Intel would need to sell Itanium at near cost to make Itanium systems more attractive from a cost basis. It comes down to what margin level is acceptable. It may come down to selling the hardware at near cost in order to keep the more profitable part of the business. I don't know what route IBM will take. But their options are open. THE WATSONYOUTH

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