Re: Froogle shows approximately 180 places selling them. Newegg shows 3 other parts selling for less than $50. Intel re-released an old el-cheapo chipset to be able to sell these in volume at the lowest possible cost. Chinese OEMs may be getting these, in lots of 1000 for less than $30.
It might seem like a lot, but it's not really. Most of those online stores won't stock more than 100 parts, let along more than 1000. The U.S. retail channel is actually a rather small percentage of the overall CPU market. Ordinarily, Intel would be selling the majority of parts to their large volume MNC partners (Dell, HP, Lonovo, etc), but since we are assuming that these parts are overstocked inventory that Intel was unable to sell at list price, the most obvious place for this stuff is the online channel market. Overall, it's probably less than 100,000 parts, but better that Intel got $30 for it, rather than having to scrap it with a disposal fee.
Re: Intel is frantically trying to hold onto share, sacrificing ASPs and revenues.
Do you realize how silly you sound? No really, it's actually quite comical. It's like feeling a drop of rain and then recommending that everyone run, screaming, to their nearest shelter for fear of lightning. Seriously, your FUD is not substantiated by the facts. If you can find something else besides the 310 and 805, whose prices are explainable, then please do. Otherwise, you are going to pieces over *one* single low end EOL part is selling for peanuts and a dual core chip that is strategically priced to ramp volumes, while the rest of Intel's price list is all on target.
Re: I am not sure if this makes any sense. It's like saying we will sell spam in order to generate demand for pâté de foie gras.
I'm not sure I accept analogies that relate quantitative price/performance numbers with qualitative human taste preferences. The 805 may be a lousy dual core performer, but it absolutely creams the single core competition in the same price bracket, and that makes it very appealing to some buyers. It also makes it a very smart retail play, since the retail market is very cost sensitive, and a cheap dual core part may be just what Intel needs to regain market share here.
Re: They may be built into the guidance, or they may not. No way to tell for sure.
Andy Bryant specifically stated in the Q1 Q&A that Intel's guidance would take into account lower volumes due to inventory reductions, and also lower ASPs and margins, so there is zero doubt that it has been built in. Of course, there's the possibility that Intel underestimated the hit to margins, because they end up with a very low end product mix, for example, but that won't drastically reduce earnings, as you make it seem.
Re: But the overriding goal appears to be to hold unit market share, not to deliver on Q2 guidance. That makes me think that Q2 results will be sacrificed to meet goal #1.
I agree, and if Intel does not hold market share, they may in fact gain some with their current pricing strategy. But like I said, Intel already guided towards lower margins and ASPs in anticipation for this, then they lowered prices and dumped inventory, and then you see Newegg.com with low priced gear. It's really not that difficult to grasp, Joe. Intel is doing exactly what they claimed that they would do.
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