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To: Mary Cluney who wrote (140268)	7/27/2001 1:06:04 PM
From: dale_laroy	Read Replies (2) \| Respond to of 186894

>If we were to use your 2% or .2% server model, each of these 6M Xeon chips would go into a server that would sell for between $60,000 to $600,000.< Boy are you off target here. Dan's argument is for CPU's to average 2% to 0.2% of cost across all server markets, including those using Celeron processors. Obviously, when Xeon processors are used, the processor would contribute significantly more than 2% to the component cost of the server.

To: Mary Cluney who wrote (140268)	7/27/2001 1:11:22 PM
From: Dan3	Read Replies (1) \| Respond to of 186894

Re: Dan's assertion that Intel sells 6M Xeon chips with an ASP of $1200? Most Xeons don't go into servers, they go into single and dual processor workstations. Most servers are small SHV servers that aren't being targeted for Itanium for several years (and that's a long time in this business - things can change). If you go back to my post, you'll see that I estimated quantities of chips going into anything but workstations and SHV servers as a few hundred thousand per year. The quantity going into what will become the Itanium class of machine is in the 10s of thousands per year. Assuming either Xeons or Itaniums replace all other chips for all existing classes of servers (a rather heroic assumption!) The 200,000 would qualify for your 2% number - accounting for server sales of $12 Billion per year. And 50,000 of the 4-way and higher machines at Pete's large server number of 0.2% per year would account for another $30 Billion of the server market. But, using my figures, annual sales of 250,000 chips produces $42 Billion in annual server sales. The remaining 1.25 million chips go into workstations and servers that sold for $5,000 to $50,000 with an ASP of about $15,000. Of course, now that Intel has dropped Xeon ASPs from $1,200 to $300, total revenue from this segment is going to be down substantially going forward. Dan