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

To: RumKola who wrote (50098)	3/7/1998 5:43:00 PM
From: Ali Chen	Read Replies (1) \| Respond to of 186894

JDP: <sure does seem that you have a lot of good sense.> I think he got all wrong again. You cannot artificially maintain two market sectors (sub-$1000 and over-$2500) independently. The two sectors are dependent, via relative performance on common applications. The real problem is that the PII machines do not provide the performance jump high enough to justify 2.5x difference in price tag. If you check out two machines at a store, one PII-300, and another P200-MMX, you could not feel any significant difference. A customer immediately sees this and is not willing to pay the SIGNIFICANT difference of $1500 for incremental performance. This is the MARKET reason why the would-be-$2500 PCs have problems of selling even at $1500. Therefore, the price has to go close to sub-$1000 level. In conclusion, the problem is that Intel failed to deliver a truly new generation of CPUs with performance that was necessary to maintain the old Intel business model. It is their pure technological fault. There are some other faults, like premature advertising of incrementally new products and price cuts which, in combination with insignificant performance gains, causes the public to wait longer before deciding on next upgrade. <Please keep the messages coming.> Sure :)