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

To: pgerassi who wrote (141168)	8/9/2001 1:22:50 PM
From: wanna_bmw	Read Replies (1) \| Respond to of 186894

Pete, Re: "Intel has never gotten list prices for its CPUs from the bulk of its sales. The pricewatch price is always lower than the suggested retail price it quotes." This is misleading, since your data is based primarily by going to Pricewatch, and looking up the first price on their list. Doing this will not give you accurate estimates because of the grey market, which can get CPUs at lower than wholesale prices. Typically, I find that the first 12 or so vendors on the pricewatch list get their inventory from the grey market. If you want a better idea of what Intel might be selling their CPUs at, I find a good rule of thumb is to read the first entry on the second page. For example, a 1.5GHz Pentium 4, which lists for $256 on Intel's investor web page, lists for $225 at the first entry on the pricewatch list (due to the grey market). But, if you go to the second page, the first entry is priced at $248, only $8 below the listed price. This can easily be explained by volume discounts, which may amount to as much as 10% (just a WAG). In that case, Intel is selling this processor for $230, and the vendor here is making a 7.5% margin. I know I have accused you of playing the Numbers Game, but do these at least make sense from the standpoint of an example? One the other hand, take AMD's prices. Their web page lists the 1.2GHz Athlon at $199. Pricewatch lists this processor for $100 on the first page, and $105 on the second. In fact, if you look on the seventh page, you will still see it listing at $139, $60 below the listed price. So either AMD is offering a 45% discount for volume purchases, or their web page is clearly out of date. This is very different than Intel, so I don't think your argument stands based on your first false assumption. I still think that Intel can achieve $200 ASP for Pentium 4 after the proposed price cut, despite the normal discounts. wanna_bmw