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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Tenchusatsu who wrote (58669)	5/18/1999 4:53:00 PM
From: Kevin K. Spurway	Read Replies (1) \| Respond to of 1580846

Re: "Then why aren't you removing that as well, especially since a low-volume product means there's more of this overhead per Xeon?" I'm not removing it because I'm estimating whether Intel is profitably (on average) producing Celerons. That kind of overhead isn't free. You may be right that there's more of this overhead per Xeon because Xeon is low-volume, but how much? I'll be conservative and say $20. That brings the cost of our virtual Mendocino to $157 - $20 = $137, still considerably more that the price tag of a $90 Celeron. Re: "I can go on and on about nitpicks, like that rather cheap price of $15 for a Xeon-sized heatsink which not only has to dissipate enormous amounts of heat, but also has to be ten times more reliable in order to be fit for mission-critical servers." If you read what I wrote carefully, you'd notice that I budgeted $25 for this assembly. Also remember that Intel IS NOT paying retail prices for this stuff. Re: "If there is truly a case for suing Intel for dumping Celerons, by all means tell the FTC and DOJ. I'm sure they'd love to see that the economists they hired are being overpaid because a few people on an Internet discussion forum can use elementary-school mathematics to prove beyond a shadow of a doubt that Intel is cooking the books." Let's try not to throw a tantrum here. I NEVER said that Intel is cooking the books. I NEVER said they were violating antitrust laws. As a matter of fact, I said just the OPPOSITE: "Is Intel selling below marginal cost? Unlikely." Of course you can nitpick all you want--I just threw out some rough estimates. I'm hardly claiming this is science. However, unless the SRAM costs for a Xeon are WAY higher than I estimated, I just can't see how Intel could make anything close to a 50% margin on a $95 Celeron, which is what Tad was estimating. Kevin