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To: Meathead who wrote (24954)	12/12/1997 4:47:00 PM
From: jim kelley	Read Replies (2) \| Respond to of 176387

Meathead, The other cost which is difficult to quantify is the support and service costs associated with the subzero. We know those costs are not zero but we do not know how large they are. A 1 hour service call would eat up all the retail stores or CPQ profit on a subzero. In order to make any profit at all, it is really necessary to have no service and no significant returns. This means the product has to have a very low service and return rate. That supports your quality argument. I reason that they are not making any money on this product line. Jim Kelley

To: Meathead who wrote (24954)	12/12/1997 6:06:00 PM
From: ed	Read Replies (1) \| Respond to of 176387

MEATHEAD: My assumption of individual components may be off, but on the conservative side. DRAM (16 MB) -------- $3 (when WON was 1100 to $1, now WON is closed to 1500) This is pretty accurate, you may quot from Samsung. MOUSE (simple serial mouse) $2 pretty accurate Chip set (4 chips from VIA) ----$25 /set (pretty accurate, you may quot from VIA) KEY board ------ $50, this is the retail price from frys electronics, for OEM in big quantity, the price mabe $30 CPU ----------- $90 (Based on estimation of INTEL's cost of $60 to $70, AMD/CYRX may sell for $90, or even $80 in big quantity) Modem -------- $30 (estimation based on retail price) HD ------------ $100 ( estimation with retail price, for big quantity with OEM, the price may actually be $60 to $70, not quite sure ) Pentium Mother board ----- $100 (a reasonable estimation, maybe lower for OEM customers) Power Supply ------ $100( this is estimated from the retail price, for OEM with big quantity, the price can be as low as $30) Cable ------------- $20 ( this is about right) Case ---------------- $50 (This is estimated with retail price, for big OEM customers You can get it for $30 directly from Manufacturers) Software $65 ________________________________________________________________________ Total : $635 --------> Max estimation $475 ---------> Possible estimation for big OEM customers. As you know AMD's chip is not necessary worse than that of Intel as long as the chips are tested with similar specs and QAed with similar tight standard. The reason that you can get AMD's cpu cheap is because AMD would like to get less profit, that is the difference. And the difference between AMD and Intel's CPU can be the yield difference, but this has nothing to do with quality, but cost , as long as the chips are tested with similar tight specs. As a design guys , you should know !!!!!!