Paul,
>re:"If there was a 300% multiplier for all major components of notebook computers, there would necessarily be the same multiplier for desktop units."
No, that is not the case because the margin (multiplier) for notebook computers and server computers is MUCH higher than for (plain old) desktop computers.
Lets do some math (and I am going to have to guess at some of this) to try and estimate the multiplier for a notebook computer; I freely admit that 300% MIGHT be high, please note that as I'm typing this I don't know where this is going to end up (suspense !).
Let's take as our example a notebook with a 12" TFT display, a P-133 CPU, 16 Mb of memory and a 1.4 Gb hard drive (I'm thinking of something in the range of a Toshiba 440 CDT). The display, bought in large quantities directly from the mfgr, is about $600, the most expensive component (this I'm relatively sure of, I've had to get quotes for such displays recently, although at lower than notebook volume levels). I'm seeing Toshiba 2.5" hard drives with a 1.4 gb capacity advertised quantity one as low as $175, so lets say that the really high volume OEM pays $145. Allow what, $225 for the 133 MMX CPU ? Allow $100 for the motherboard, $100 for the power system (including the battery), $100 for the keyboard, mouse, memory (16 Mb), sound system (other than the parts on the motherboard) and $75 for the case parts and software. Finally another $75 for the CD-ROM drive and floppy drive. That adds up to something like $1,420. Best Buy and CompUSA here both advertised this computer here in today's sunday paper for $2,799.
So, perhaps 300% was indeed high for this system, which would be considered a "value" system. These estimates may be off, my guess is that in aggregate they are probably $200 to $300 high, so the multiplier from mfgrs. cost to selling price is probably more like 200% than 300%. This covers all of the overhead of both the manufacturer and the distribution channel (most typically mfgr to distributor to retailer).
Again, as I indicated in my previous msg., pricing is usually based on market, NOT on cost.
All of that said, based on your two recent statements:
"Since a Pentium MMX costs $200 to $500 ... If Intel gave the Pentium away for FREE, the price would only drop by the cost of the Pentium, ($500 maximum)."
and
"If there was a 300% multiplier for all major components of notebook computers, there would necessarily be the same multiplier for desktop units."
It is my opinion that you should stick to your day job (engineering and technical matters). Clearly your background is not in marketing or general management.
Barry Watzman |
