John, RE: From my perspective, it's a minor issue, if it's an issue at all. X-box processors are a small percentage of Intel processors, low end, volume spec business. My guess is they have a small GM profit, a tiny gross margin dollars profit. If it turns out they have a tiny gross margin loss, no big deal.
On a straight numbers perspective, you're right, the numbers are so small that they're meaningless.
From a wider perspective, though, it takes on more importance.
If Intel is making money, any money at all, on XBox sales, then in the end it is just another Intel win, a way for Intel to extend an old product line and wring some extra revenues out of it.
But if Intel is losing money on sales to Microsoft, then that raises the possibility that Intel is putting more emphasis on market share than was formerly the case. There is a point where market share and profits are direct tradeoffs, and if Intel has come to that point, it's important, even if the numbers are small. |
