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To: Paul Engel who wrote (20611)	11/27/2000 7:57:10 AM
From: niceguy767	Read Replies (1) \| Respond to of 275872

Paul: "There was a limited number of systems and as expected, these buyers were all early adopters. " Different people, I guess, arrive at different interpretations...When I read the above, it reminds me of early Edsel sales...I guess those purchasers were ultimately well looked though as the Edsel did/does make for a great collector's item!!! :-)

To: Paul Engel who wrote (20611)	11/27/2000 8:39:47 AM
From: steve harris	Read Replies (2) \| Respond to of 275872

Paul, re:"HP sells out of P4 systems" I heard Intel acquired most of them. Is that true? :o) steve

To: Paul Engel who wrote (20611)	11/27/2000 8:54:38 AM
From: Dan3	Read Replies (1) \| Respond to of 275872

Re: HP sells out of P4 systems One of the shopping networks was also reported to have sold out. They had 200 to sell and no expectations for more in stock new term. It sounds like Intel may have produced as many as 10,000 P4s, but most likely fewer. Why? Let's do the arithmetic; A P3 costs Intel $25 or $30 while an Athlon costs AMD $30 or $35. Since the slowest 25% of the Athlon chips bin out at about the same speed as the fastest 25% of the P3s, AMD is pretty happy. P4 can fit 1/2 to 1/3 as many chips per wafer as P3 or Athlon, and is a very new, somewhat esoteric core so yields per wafer are probably somewhat lower - but will get better next quarter. Add to that the $70 rambus subsidy this quarter ($60 next quarter) and Intel's direct variable costs for labor, materials, and rambus rebate per chip will be going from around $175 this quarter (or more, depending on yields) to around $125 by the end of Q1. A chip with an official Q1000 price of $600 returns at most $400 after terms, discounts, co-op, etc. so Intel's gross margin on P4 is barely above 50%. Now allocate depreciation, overhead, corporate advertising, etc. A P4 or Athlon selling for $100 (list $150), on the other hand, returns a gross margin of 65% to 75%. Any wonder why Intel can't afford to sell too many P4s? Dan