I think Intel got a bad rap last week from Kurlak. He noted that when the process changes from .35 to .25 and .18 microns, you can get more chips per wafer. What he neglected to note was that as chip complexity increases, the chip size increases and you get fewer chips per wafer. (I don't know what the net result is.)
The PC companies who sell through distributors and retailers have a different set of problems than companies like Dell and Gateway. Compaq, HP and IBM have been blaming their problems on price wars, but Gateway didn't have a problem, and if Dell shows its traditional increase in sales and profits, it will be evidence that Gateway's and Dell's direct sales model is far superior to the models of the traditional PC companies. I suspect that their real problem is that because of recent rapid component price reductions, Dell and Gateway were able to reduce prices immediately. Compaq, HP, and IBM had to respond by cutting prices to prevent loss of sales. Compaq had the worst problem because last fall they built up far too much inventory in their distribution channel. I think the biggest benefactor of PC component and chip price drops is Dell and Gateway.
(I am not saying that Dell's price won't drop. That depends on a lot of things and the price has moved up very fast.) |
