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To: Paul Engel who wrote (2126)	11/14/1997 9:41:00 AM
From: Larry Loeb	Read Replies (1) \| Respond to of 6843

Paul, Something may be going on. Check out this newswire: November 13, 1997 Analyst Says Intel Is Offering Further Pentium II Price Cuts By CHRISTOPHER GRIMES Dow Jones Newswires A well-known chip-industry analyst said Thursday that Intel Corp. is instituting further prices cuts on its Pentium II chips in order to speed up the market's acceptance of them. Drew Peck, an analyst at Cowen & Co., said Intel is offering discounts to selected customers that go beyond the price cuts that took effect Nov. 1. As an example, Mr. Peck said Intel is selling the 233-megahertz Pentium II chip for $250 to $300 to some of its customers. Those chips were reported to cost $401 at the beginning of November. Intel didn't immediately return phone calls for comment. As part of its regular regimen of cutting prices three times a year, Intel cut chip prices by 13% to 40% on Nov. 1, with most of the cuts at about 20%. In August, the company reduced prices by 30% to 50%. In a note Thursday, Lehman Brothers Inc. analyst Michael Gumport wrote that he had heard from clients that Intel was planning to cut prices in December. He wrote that if this is true, it would be "a very unusual move." Mr. Gumport wasn't available for comment. Mr. Peck said he had heard the cuts would begin in January. But he said if Intel is offering reduced prices to some companies, it may not choose to formally announce price cuts later on. "The issue of a formal price cut becomes academic," he said. He said aggressive price cuts are a good strategy for Intel in the long-term, although there could be short-term problems with gross margins. "It makes good sense to be doing that," Mr. Peck said. "Intel's highest priority is to move users to the Pentium II as quickly as possible, and if they can't do that based on technical merit alone, then they'll do it through pricing." Intel spokesman Tom Waldrop said the company doesn't comment on future pricing moves. But he did say the company tends to have some price moves each quarter. Those moves, he said, are revealed only to Intel's customers. ------------------------- Just throwing out this news item. I have no knowledge of its authenticity. Larry

To: Paul Engel who wrote (2126)	11/25/1997 5:44:00 PM
From: Petz	Read Replies (1) \| Respond to of 6843

Paul, re:<Why do you use different explanations for the same phenomenon when they apply to AMD and Intel chips?> Excuse the late reply, I was gone for 8 days. In my original post I marveled that the MMX-233 was being sold in single quantity for just $2 over the wholesale (quantity 1000) list price. Having watched thechipmerchant.com prices for about six months now, I find that their posted retail price on high quantity parts like CPU's and memory chips is normally 3-7% above the manufacturer's posted wholesale price. So, the expected price of an MMX-233 chip is $309 to $321. Therefore, at $302, the MMX-233 is being sold BELOW its expected retail price. Anything outside the 3-7% range of markup indicates an imbalance between supply and demand. Thus, the AMD-K6, currently at $295 is 31% above its wholesale price of $225 and above its expected retail price. This indicates that demand still exceeds supply for the K6-233, but not as much as a week ago when the price was $360. OTOH, the MMX-233 is selling now at $308, which is below its expected retail price. Now, you probably assume that the reason the MMX-233 is so cheap is that no one wants this socket 7 CPU anymore and everyone wants the Pentium II. Sorry, the Pentium II 233 and 266 are both selling below expected retail price. So you see, I am consistent in my explanation of retail prices. No AMD CPU's are selling below their expected retail price, many Intel CPU's are. Petz