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Technology Stocks : Intel Corporation (INTC)
INTC 40.56+10.2%Nov 28 9:30 AM EST

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To: SilentZ who wrote (152146)12/12/2001 2:11:56 AM
From: Tenchusatsu  Read Replies (2) of 186894
 
Elmer and Z,

Elmer: <MSFT may have decided that an unreliable source wasn't worth it regardless of the lower price. Pay a higher price and get a reliable supplier.>
Z: <For a piece of hardware they're taking a loss on already? Doubtful.>

I'm not necessarily agreeing with Elmer, but having a reliable supplier is very critical, especially for launch. Do you recall the very tight supply shortages of Sony Playstation 2 when it was released last year? Sony couldn't even meet their original commitments, much less the demand which far exceeded their expectations. Luckily for them they didn't have any competition during their supply crunch.

Fast forward to today, and Microsoft wanted to make a big splash with X-Box. They not only had to compete against Sony, the current king, but they also had to compete against Nintendo who was introducing their GameCube around the same time. Imagine if Microsoft couldn't supply enough X-Boxes due to CPU shortages? That would quickly kill any hope of ever competing against the formidable Sony and Nintendo.

Tenchusatsu
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