Engineer:
So true, with declining ASPs, the way to make money is to increase the volume of products to help out Earnings and introduce products at the high end with higher ASPs to hopefully increase Gross Margins. However, it has taken Intel at least 1 year for their earnings to grow when their ASPs went down.
With respect to your example of CPUs, yes Intel used Manufacturing efficiencies to make more CPUs, however, what is a company to do when their ASPs are declining and they are capacity constrained? I don't think Intel's ASPs were ever as high as 575, and I believe their current ASPs are much lower than 275. I am thinking around 230, but will look for a release.
I agree with you that with more vendors of "parts", the prices of components will reduce, however, there are more competitors entering the market (yeah, I know Motorola)
With Qualcomm's segementation strategy, hopefully it will raise their ASPs.
As I said before, I merely argued that lower ASPs are not necessarily good for a company
dave |
