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

To: Jim McMannis who wrote (58753)	5/19/1999 12:49:00 PM
From: Process Boy	Read Replies (1) \| Respond to of 1572102

Jim - < I figure about $30 for a ppga Celeron. So the idea that Intel loses money on a Celeron just doesn't hold water. > A very respectable stab at it, IMHO. PB

To: Jim McMannis who wrote (58753)	5/19/1999 12:54:00 PM
From: kash johal	Read Replies (1) \| Respond to of 1572102

Jimmy, Re: "I figure about $30 for a ppga Celeron. So the idea that Intel loses money on a Celeron just doesn't hold water." Well we know AMDs marginal costs are similar. The key to NOT losing money is how the huge overhead and depreciation and R&D costs are amortized. AMD has not had the benefit(yet) of Large volumes/multiple fabs etc. This is a business with huge fixed costs and low variable costs. So the P/L is very very non-linear. Best regards, kash

To: Jim McMannis who wrote (58753)	5/19/1999 2:22:00 PM
From: Kevin K. Spurway	Read Replies (3) \| Respond to of 1572102

Re: "I figure about $30 for a ppga Celeron. So the idea that Intel loses money on a Celeron just doesn't hold water." You're not including related sales and marketing and general and administrative costs in this number, are you (in other words, you're talking marginal cost)? I'd guess you're also not including the Celeron product line's share of the R&D burden as well. Not to mention all the depreciation expenses associated with fab ownership. It's possible that from a cash perspective Intel does just fine with the Celeron, but from an accounting perspective it loses money. Kevin