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Technology Stocks : Intel Corporation (INTC)

INTC 51.13

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To: Cycleman who wrote (54945)	5/1/1998 11:42:00 PM
From: Paul Engel	of 186894

Cycleman - Re: "I was quoted about $2,300 for a Dell 400x Optiplex with 128k ram and a 6gb hd (excluding the monitor). This is really something. I am used to paying over $4k for the latest and greatest Intel-powered box every couple of years. " You have COMPLETELY missed the BIG PICTURE! Intel introduced the 400 MHz Pentium II at a list price of $824/each in quantities of 1000 - which is within 10 or 15% of their historical introduction price of CPUs with their latest and greatest technologies. The 300 MHz Pentium II, when introduced last year, had a listed price of $1800+ but that lasted only a few months once Intel verified that they could yield that speed grade in high volumes (0.35 micron process). The $2300 system cost you were quoted reflects MASSIVE price reduction s in MEMORY and Hard Disk Drives over the past year as well as significantly lower monitor prices. All these COMPONENT price reductions are folded in to the $2300 system price and within that pricing framework is an excellent profit margin for Intel. And don't forget. The 400 Mhz Pentium II at 131 sq. mm.(0.25 micron process) is cheaper to make than last year's 203 sq. mm Pentium II (0.35 micron process)...giving Intel even HIGHER MARGINS as well as high ASPs for the "high end" chips. The price of the 400 MHz Pentium II will certainly fall with higher volumes as will system prices and Intel will still have a very healthy profit on these...the envy of every member of the "Clones 'R Us" crowd. Paul

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