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

To: dale_laroy who wrote (141157)	8/9/2001 10:58:56 AM
From: wanna_bmw	Read Replies (1) \| Respond to of 186894

Dale, Re: "The reason this seems drastic is that the 2.0 GHz at $562 will be about 4.3 times the cost of the 1.5 GHz at $130. This is almost unprecedented in recent times." I'd say it may be too soon to make that assumption. Intel has always had a huge price spread. When the 1GHz Pentium III was first released, the price spread was over $700. In earlier times, the price spread was even greater. But it hasn't come to the point, yet, where 0% of the consumers out there would spend the extra $430 to get a 2.0GHz system over a 1.5GHz system. In many cases, people are already doing that. For proof, check out the skus in any retail store. You'll still find Pentium 4 products that have a greater than $400 price spread, and I doubt they are selling at 0%. If vendors can get a decent 2.0GHz system at $1600, which is twice the price of Intel's baseline 1.5GHz system at $800 (thus allowing some headroom for adding a few other features such as larger disk drives and more memory or better graphics), then I'm sure there will still be a number of people interested in buying it. The >$2000 market is may be practically dead, but there is still a lot of life in the $1500-$2000 market. Of course, I know as well as you that Intel won't sell as many 2.0GHz Pentium 4 chips as they will 1.5GHz chips. The distribution will be a bell curve, with probably 1.7GHz at the sweet spot. Since that speed grade is located at around $190, it's not difficult to imagine an ASP of $200, given the price distribution. Of course, I'm not saying this is definite, and I certainly don't intend to prove to you with numbers just how possible it is, but I have a feeling that the people who actually get paid to perform this level of book-keeping have a much better idea of how much revenue they can yield than you or I. wanna_bmw

To: dale_laroy who wrote (141157)	8/9/2001 2:54:32 PM
From: Noel	Read Replies (1) \| Respond to of 186894

Dale, Re: Intel price cuts, If you have been following Intel's pricing strategies from the days of the Pentium this has always been the case. As wanna_bmw points out the spread right now is much less than what it used to be. The reason for this is that Intel cannot provide that many 2GHz parts. So it artificially constrains the demand by making the pricing appear ridiculous. This way only someone desperate enough for that incremental performance, gamers and some server people, pay that premium. The OEMs are also to blame here since they differentiate their products similarly. You will see 2GHz processors being bundled into systems with other high end components only. Even though at times it may make more sense from an overall value perspective to bundle cheaper processors with high end components. Watch them lower the price on the 2GHz part when Northwood debuts!

To: dale_laroy who wrote (141157)	8/10/2001 1:49:33 AM
From: stak	Read Replies (1) \| Respond to of 186894

dale, I think that's fine as long as those boatloads of P4 1.5 GHz sales are not canibalizing Intel's own P4 1.8 to 2.0 speed grades. If they're stealing AMDs sales then the Aug 26th price drop of P4 1.5GHz worked like a charm. If not then Intel just gave away a lot of bottom line. I think you're right tho' in that 2.0GHz P4 sales will be poor. stak << Intel may move boat loads of 1.5 GHz P4 processors at $130, but at $562 the number of 2.0 GHz P4 processors Intel manages to move will look like>>