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

To: dale_laroy who wrote (141189)	8/9/2001 5:54:48 PM
From: wanna_bmw	Respond to of 186894

Dale, Re: "assuming Intel is successful, they will be converting purchasers of the 1.0 GHz PIII at $200+ to purchasers of 1.5 GHz P4 at $130. It seems to me that this will be lowering ASP." You make a very good point, but here's my take on things. Right now, according to Intel's web page, the 1GHz Pentium III costs $193, and the 933MHz Pentium III costs $163. Also, according to xbitlabs, starting on August 26th, the 1.6GHz Pentium 4 will cost $163 and the 1.7GHz Pentium 4 will cost $193, effectively putting them at the same price points as the Pentium III right now. On the low end of the scale, the 1.5GHz Pentium 4 will fulfill those volumes originally taken up by low cost, low volume Pentium III skus (such as the 750MHz and 800MHz, etc). Now, this alone would mean less margins, since the Pentium 4 is more expensive to make than the Pentium III. That's why I believe that Intel intends to encourage more resellers to sell up in performance, to a $256 Pentium 4 1.8GHz or a $375 Pentium 4 1.9GHz. Even small volumes of the $562 2.0GHz Pentium 4 can come a long way towards pulling ASPs higher. I also believe that Intel has been holding back on their marketing, and will have a demand creation campaign at the 2.0GHz launch to encourage sales of higher-end products. There have been many hints of this in recent press releases, discussing the convergence of 20 years for the PC and 30 years for the microprocessor. I believe such a campaign can generate at least mediocre success, and that should be all it takes to allow Intel to meet estimates for the quarter. I don't think this is an unrealistic expectation, unless the market truly is as bad as some people say. Effectively, there is a distinct possibility of this backfiring on Intel completely. I believe I will take the risk in my investments, though, and trust that Intel can pull this off, but I don't expect everyone to agree with me. wanna_bmw