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To: Jdaasoc who wrote (73441)	5/22/2001 11:42:06 AM
From: pompsander	Respond to of 93625

John, excellent point...This is where intel's size gives it incredible power. It can use pricing policy to pick up or protect market share in those targeted segments...and a new rollout only makes the pricing plan easier to "explain" to the marketplace. Three to six months before the market demand begins to pick up is exactly when the strongest players will flex their financial muscles to try to maximize their position. Then, later, the rising tide of demand will allow them to reestablish margins. Dell is perhaps too out front with this approach right now, but who is to say? None of us will know for a year until the dust settles and we are back in a "normal" demand market and we can better count the winners and losers. The xeon deal sure looks powerful.

To: Jdaasoc who wrote (73441)	5/22/2001 12:02:04 PM
From: pheilman_	Read Replies (2) \| Respond to of 93625

John, Re: "You fail to realize that Intel is pricing the XEON chips, which is basically a P4 with extra cache that INtel used to charge a very heavy premium for, slightly above the cost of the P4. You fail to realize that Intel will never allow themselves to lose to AMD on the high end." XEON chips are P3s with extra cache. The P4 is a new micro-architecture. You were correct that they have a huge cache. They are very high performance and used to be able to be sold at a commensurate premium, not anymore. This points out the error in your second sentence, Intel has already lost control of the high end. For years Intel controlled the high end and charged a huge premium for their fastest parts and dropped the price steeply for regular parts. This gave them huge margins, and made it very difficult for competitors to enter the market as they would have to sell against the much cheaper parts. As long as Intel controlled the high end they could choose the rate at which to move the slope. With the release of the Athlon AMD took control of the top end and control of the rate to move the slope.