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Subject: Re: $333.70 per elo point over my pc..

Author: Jeremiah Penery

Date: 07:19:30 02/21/03

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On February 21, 2003 at 09:45:28, Robert Hyatt wrote:

>On February 21, 2003 at 01:52:34, Jeremiah Penery wrote:
>
>>If you can sell a million 3GHz processors today for $600, and another million
>>3.2GHz processors next month for $600 (plus n 3GHz ones for $400 now), and then
>>a month later you sell a million 3.4GHz processors for $600, etc., why in the
>>world would you want to sell 1.2 million 4GHz processors today at $600, and lose
>>out on ALL those intervening speed grades?  Do the math, and it just doesn't add
>>up.  The chip companies make a lot of money by trickling out clock speed
>>advances, because they can charge more for the highest clocked parts.  Releasing
>>something 2x faster today than what has previously been released is NOT going to
>>net them more money in the long run.  Basically, it amounts to bleeding the
>>customers for all they're worth - and it works.
>
>
>I don't buy that.  Because if I can widen the game between me and my
>competitor significantly, I am going to get a bigger share of the market,
>so producing a chip that is stamped slower than what it can actually run at
>doesn't make sense on the top-end of the market.  Yes, I'd take my 3.2ghz
>line and siphon off some and mark them 3.06 and 2.8 and so forth, if there
>is a demand down there.  But I'm not going to hold back my top-end chips
>as the more separation there is between me and my competitor, performance
>wise, the larger my market share.  Otherwise there would be no SPEC, no
>THWP, etc...

Intel already has 85%+ of the desktop market share, and probably even a greater
portion of the small server share.  Killing the competition to gain that extra
10-15% market share does not net them more money in the short term (the math is
not complicated), and invites serious problems in the long run, such as possible
anti-trust investigations if AMD goes out of business.

>>Intel raises clock speed just enough to stay ahead of their perceived
>>competition.  If AMD magically released a 4GHz part tomorrow, do you seriously
>>doubt that Intel wouldn't be able to follow suit almost immediately?
>
>Yes I do.  Because they would have already released it to get the lions share
>of the top-end market where the profit is highest.

Intel _already_ has the "lions share of the top-end market".  Even more so than
the lion's share of the desktop market they have.



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