Dave,
Do you know if the gross margin percentage for MPUs has been dropping in any abnormal way? (I'm sure it drops normally through a processors lifetime, and then the next generation comes out.)
I mean, MPU prices have always been dropping. If rapid price drops were an impediment to enormous success, then there wouldn't be any semiconductor companies at all.
If gross margin percetages are perpetually zero or negative, that's another matter. If they're simply low, one needs to decrease costs and increase volumes. If everyone else is doing the same for the same reason, it'll be a bloody war with some casualities, with only the arms merchants being the sure winners.
The only way that the arms merchants won't win is if there's a cartel (that is, the firms agree not to compete since some would lose and all would suffer), or if the predicted result of not acquiring the new machines while others do is better than the result of acquiring them. (This last could be if the machines were extraordinarily expensive, or had a very short lifetime, or if one were planning to withdraw from the relevant business, e.g.)
--John |
