Mohan,
"My take on it is that if IBM were calling shots still now, a 386 PC would be a standard and it would cost about $5k. Thanks to Intel and Microsoft things are far better and a lot cheaper. On the other hand, if Intel and Microsoft didn't literally kill the competition, a Pentium 200 MHz machine would cost less than $1,000 now..."
Surprised to hear you giving some credit to Wintel at last! You see that evolution is working slowly toward greater competition and consumer surplus. First there was monopoly. Now there is duopoly. We can only hope for an oligopoly!
I don't see how Intel is preventing a 200 MHz machine from costing less than $1,000 today. It's the lack of effective competition from CYRX and AMD that is preventing this price point from being reached sooner. As for price points, INTC actually helps these companies by providing some degree of price umbrella for them to operate under. If they can't catch up with the leader, that's their problem. If you know something about abuse of market power, I would be eager to hear it, as would DOJ and FTC. What abuse would you accuse Intel of other than not pricing high end Pentium chips at marginal cost of production? <G>
Your economic philosophy sounds like it is a remnant of the era of Indira Gandhi's socialism and LSE. You have grown up in that era so I cannot blame you if some of those teachings rubbed off on you. But have you not seen that that approach does not deliver the goods on long-term economic growth because it stifles innovation?
Your wrath for INTC reminds me of those who blame pharmaceutical companies for the high cost of drugs. You should know that those PhDs need to be paid for their research and that new fabs cost $2B each. R&D is not cheap. Nor is it risk-free. And we greedy shareholders want our piece too!
As you are an Indian emigree, I can understand your sensitivity to price, but on balance I think you would agree that the pace of innovation by Intel has brought intense price pressure on all but the high end of the product spectrum. In what other industry do you see prices coming down 50% every eighteen months? And yes, Pentium 200 chips will do so as well.
With all due apologies to William Shakespeare, you should come to praise Intel, not to bury it.
Namaste,
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