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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: wanna_bmw who wrote (141110)	8/9/2001 4:03:28 AM
From: pgerassi	Read Replies (1) \| Respond to of 186894

Dear Wanna_bmw: Have a problem with math? 27 million times $8 each is $216 million, not $100 million. Given a price war, all other CPU lines may experience an ASP decline, not just P4s. So $8 is not out of line and may even be exceeded by a substantial amount. Two other factors creep in, production costs (with a mix toward P4s, APC will go up given that price war and changeover will cause P4 ASP to drop below P3 ASP for the chips switched to promote switchover) (One number is for half of the P3s to switch to P4s (upper bound for Q3) or about 6 million at $40 each ($10 for drop in ASP each and $30 rise in APC) or $240 million cut in profits) and overall PC market unit declines (revenues would be far harder hit than costs). To get to $6.8 billion in revenues, an additional $500 million must be found over and above Q2 numbers. At $164 each (mainstream means mean ASP at most), gives us a lower bound of 3 million additional P4s in Q3 holding all other things constant (not very likely). That means a 9% rise in units just for Intel assuming AMD gains none at all (not possible all else being the same). That would be very unlikely given that many estimates are for Q3 reductions in PC units QoQ. AMD would likely get 300K more in Q3. Changeover would require about at least 3 million more units just to keep to Q2 revenue given ASP reductions planned. No way to get to $6.8 billion without a recovery boom right now. That is not in the cards. Pete