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

To: Thomas M. who wrote (49513)	3/4/1998 11:09:00 PM
From: Barry A. Watzman	Respond to of 186894

>re: One more round of price cuts, and INTC might just extend its streak of no-growth quarters. Well, I certainly understand your point, but here's why I'm not so sure. What matters, I THINK, is ASP (AVERAGE selling price, per CPU). At current prices (a PII/233 is $300, and a PII/266 is close to $500), people are not buying those, and P200 MMX's are only about $140. But if a PII/266 were $250, I'd buy that instead, in other words, I'm willing to spend more, it's a matter of perceived value. It's possible that by lowering prices, Intel can get the Average Selling Price up more than the costs go up, indeed get them back to the $200 - $300 range instead of the $100 - $200 range. Or, to put it in other terms, a price cut is entirely capable of getting me to spend MORE actual dollars, as long as the perceived value goes up.