SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : Formerly About Applied Materials
AMAT 249.89+3.1%Nov 26 3:59 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Katherine Derbyshire who wrote (24440)9/20/1998 12:57:00 AM
From: Clarksterh  Read Replies (2) of 70976
 
Katherine - Ultracheap computers have lower margins. That has been stated as a fact by both the box makers and the chip makers, and the statement is supported by the recent financial results of these companies.

I am in no way disputing this, nor am I denying its impact on current equipment orders. But I am disputing that it ( lower priced PC's always cause lower margins) necessarily must be so. I think the current drop is computer prices is at least partly driven by over capacity, and hence there is a drop in margins as their always is in an over-capacity situation.

But, if the drop in prices occurs because no one needs the extra computing power, but instead they want an extra computer for their kids, or, ... then you could get a drop in price without an over-capacity problem with its attendent drop in margins. I think this is part of the pricing dynamics, but I'll admit I lack good data to back it up.

In other words, I could see (and in fact expect) a situation where 5 years from now the average computer will sell for $500 but the margins will be approximately the same as now because they are selling 3 times as many of them (one for the kitchen, ...), each only a little more powerful than todays top-of-the-line machine.

Clark
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News