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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: Jeff Jordan who wrote (6059)	8/8/1998 2:06:00 AM
From: Barry Grossman	Read Replies (2) \| Respond to of 93625

Jeff, <<why do you think INTC has been dropping their prices so often lately.>> I think we disagree on this point. Intel used to drop their prices quarterly and now the pace has picked up. AMD sets their prices after Intel does. AMD is following Intel's lead when they announce that their price will be 25% below Intel's. Try to remember that AMD LOSES MONEY at the price levels they go to in order to compete with Intel - and Intel makes >$1B/quarter at the prices they set. By the way, in case you haven't figured out how Intel can make so much money when they drop prices as often as they do, it's because their costs come down at a rate that keeps their profit margins as high as they are. Sometimes their rate of cost reductions even exceeds their rate of price decreases. This is not something that Intel issues press releases on or that the analyst community likes to talk about or the media explain. You can see the results quarter after quarter though. BIG PROFITS. AMD loses even more money the lower they drop their prices. AMD's chip may be desired by some, but a money losing concern that trys to compete with the manufacturing prowess of the giant, is doomed to failure by virtue of the fact that they will run out of cash and credit long before the giant runs out of $1B+/quarter NET AFTER TAX PROFITS. By the way, we do agree about Rambus. Barry