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Technology Stocks : Intel Corporation (INTC)

INTC 41.14

-3.4%

Jan 8 3:59 PM EST

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To: Glenn Barrera who wrote (61067)	7/23/1998 11:55:00 PM
From: Paul Engel	Read Replies (1) of 186894

Glenn - Re: "a product mix when you replace one processor with one that sells for less (unless you can make it for less). " You are missing the big picture. The cheap Celeron is replacing the Pentium MMX. At $100 for a Celeron, it will replace a Pentium MMX which sells from $75 to $125 - on average, it will be a wash. The die size is also comparable - with desktop Pentium MMX's still being 0.35 micron parts (128 - 140 sq. mm) vs, 131 sq. mm for the 0.25 micron Celeron. Intel's shipped about 10 million Pentium MMX's last quarter - so shipping a mixture of Celerons from $100 to $200 may actually RAISE the ASPs! Note - the margins may not increase because the Mendocino Celerons will have a larger die size - but keeping the margins CONSTANT - while replacing 10 million Pentium MMX's at the low end is a heckuva trick. And 400 and 450 MHz Pentium II's and XEONS will BOOST ASP's and margins. Think of that ! Paul

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