Hal,
For Diamond, I think it goes beyond price concessions. While we don't know the exact numbers, it seems reasonable that they sold a lot of 3DII cards; they should have achieved some economy of scale in addition to the price reductions on RAM they certainly benefited from during their 2Q. Their competitors chose to pass some of similar savings down to the wholesalers/consumers, while Diamond hoped to hang on to, presumably, larger margins at the end of 2Q. They needed to break even on 2Q, they gambled and lost.
On the other hand Creative knows that if they can squeeze Diamond on their 3DII prices, Diamond will be in a world of hurt come 3Q and Creative knows exactly how much leway Diamond has.
Best Regards,
Jim |
