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To: Jim McMannis who wrote (80005)	5/13/2002 6:30:35 PM
From: greg s	Read Replies (1) \| Respond to of 275872

Son of Xbox cheap and cheerful? Race to cut costs, prices By Mike Magee, 13/05/2002 16:06:35 BST OVER AT THE also very spicey Digitimes today we learn that Microsoft will push its suppliers of DVD drives down by around 30 per cent, as part of a general cost cutting exercise before.... ....it says, the Xbox 2 is launched in September. Digitimes calls it the "second generation Xbox", and put together with all the other gossip over the last month or two, this makes for a really interesting picture. The price cuts, and the need for Microsoft to find cheaper components to compete with the ever popular Sony PlayStation 2 and the Nintendo Gamecube, underline that the console market is a terrible place to be in. Nevertheless, Microsoft said before launch in the US last year that it knew it had to be there for the duration, and it's only conjecture how many millions it's expended on the product so far. Both Nvidia and Intel, which supplied graphics chips and processors for the first Xbox, don't seem to be particularly ecstatic about sales so far – the latter reported in its most recent financial report that the Pentium IIIs it is supplying to Microsoft show "flat growth". Microsoft itself does not anticipate now it will sell more than four million Xboxes this year - its overly optimistic target before launch was for six million units. µ theinquirer.net

To: Jim McMannis who wrote (80005)	5/13/2002 9:50:36 PM
From: Road Walker	Read Replies (2) \| Respond to of 275872

Jim, re: I wonder when MS will start putting the squeeze on Intel for cheaper chips. Every manufacturer "puts the squeeze" on every supplier, all the time. There are few if any exceptions, it's the nature of business. Say you spend $100 for a product. The finished goods manufacturer, all the component manufacturers, the packaging manufacturer, the media companies that sell the advertising, the shipping companies that move the product, the retailers that sell you the product, every one of those guys are hustling against each other to get another penny or dime or buck of that $100 cash that you spent for the end product, and to screw the other guy out of his penny or dime or buck of profit. It's the dance of commerce. When you say "I wonder when MS will start putting the squeeze on Intel for cheaper chips", it just show that you don't understand business. Microsoft is always trying to take a buck or two out of Intel's pocket and put it into Microsoft's pocket. John