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To: Cycleman who wrote (54945)	5/1/1998 5:13:00 PM
From: Mary Cluney	Respond to of 186894

Cycleman, >>>Mary and all: But what I am afraid may have a lasting effect on Intel's profitability and growth is the price deterioration now taking place. <<< That is why Craig Barrett and Andy Grove gets paid the big bucks. Andy Grove tells us he wants to see 1 billion connected computers. For some of these 1.9x billion eyeballs several thousand dollars is lunch money - for many others 4 or 5 hundred dollars is all they have. Craig Barrett has be charged with targeting all the eyeballs and their wallets. The point is when you are dealing with such large numbers - there are many different markets with different requirements and more importantly different size budgets. These markets are not monolithic and Intel will do some segmentation and then address them separately. At least that is my take on this. Mary

To: Cycleman who wrote (54945)	5/1/1998 6:00:00 PM
From: Francis Chow	Read Replies (1) \| Respond to of 186894

<Meaning that at least part of the business market may be shifting downwards, like the consumer sector.> But of course :-) isn't that the whole idea between thin-client. You can get by with a few powerful server machines, everybody else works from a cheap box via a browser with java.

To: Cycleman who wrote (54945)	5/1/1998 11:42:00 PM
From: Paul Engel	Respond to of 186894

Cycleman - Re: "I was quoted about $2,300 for a Dell 400x Optiplex with 128k ram and a 6gb hd (excluding the monitor). This is really something. I am used to paying over $4k for the latest and greatest Intel-powered box every couple of years. " You have COMPLETELY missed the BIG PICTURE! Intel introduced the 400 MHz Pentium II at a list price of $824/each in quantities of 1000 - which is within 10 or 15% of their historical introduction price of CPUs with their latest and greatest technologies. The 300 MHz Pentium II, when introduced last year, had a listed price of $1800+ but that lasted only a few months once Intel verified that they could yield that speed grade in high volumes (0.35 micron process). The $2300 system cost you were quoted reflects MASSIVE price reduction s in MEMORY and Hard Disk Drives over the past year as well as significantly lower monitor prices. All these COMPONENT price reductions are folded in to the $2300 system price and within that pricing framework is an excellent profit margin for Intel. And don't forget. The 400 Mhz Pentium II at 131 sq. mm.(0.25 micron process) is cheaper to make than last year's 203 sq. mm Pentium II (0.35 micron process)...giving Intel even HIGHER MARGINS as well as high ASPs for the "high end" chips. The price of the 400 MHz Pentium II will certainly fall with higher volumes as will system prices and Intel will still have a very healthy profit on these...the envy of every member of the "Clones 'R Us" crowd. Paul