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

To: Tenchusatsu who wrote (75106)	3/2/1999 2:54:00 PM
From: JDN	Read Replies (2) \| Respond to of 186894

Dear Tenchusatsu; But if Toshiba is loading margin on the INTC product and underpricing the AMD product (because they can get away with it in the market) it isnt good for INTC. I presume Toshibas interest is in maximizing sales while minimizing negative effect on profit. But nevertheless INTC suffers. I think if all this is true, INTC should evaluate whether or not Toshiba is someone they want to do business with. JDN

To: Tenchusatsu who wrote (75106)	3/2/1999 4:53:00 PM
From: kash johal	Read Replies (1) \| Respond to of 186894

Tench, Re Margins Perhaps you don't understand the margin game. 50% gross margin means that you sell at 2x your cost. So if K6 costs $120 and PII mobile costs $500 lets say. At 50% margin the net difference in sales price due to $380 difference in cost needs to be $760. In addition everybody charges lower margin on lower priced devices and gets higher margin on the higher end parts. It's trying to compare Celeron and PII prices. Margins for Intel and the PC vendors are lower at low end and higher at high end. In addition Toshiba has to set it's price when looking at the competitiion. There are lots of K6-2 333 mobiles out there now in the $1200-$1800 range. SO they have priced themselves appropriately and are offering a larger screen. I bet if you look at PII mobile prices they are all in the $2500 range. So they have a competitive solution their. In terms of gross margin dollars they make more with the PII's and I am sure they wish they could only sell the higher end machines. In this case the price is also being set by the market, just as it should be. Regards, Kash