Replies to post #24482 on Intel Corp (INTC)

[jhalada]

Tenchu,

With all due respect, I think your challenge is unfounded and an attempt to troll Beamer. Which is fine if that's exactly what your intention is, but the reality is that Intel has huge economies of scale on its side, which gives Intel a ton of leeway when it comes to competitive threats.

Intel's leavay is in ASP $50 to $55 higher than AMD's, at which point 2/3 of the profit disappears. With $68 reduction in ASP (maintaining the same units) Intel would be losing money.

Now when you hear that there will be some great cost reduction of say 25% (generally offset by increase in die size eating the reduction), they are talking about some 5% on $25 we are talking about a dollar and a quarter.

Just to put this number in a perspective, compare it to only a minor movement on ASP, which TWY estimated to have dropped by $5 last Q. So magnitude of a very minor drop in ASP that barely gets mentioned during the CC can be as 4x of some "cost reduction" that Intel trumpets.

The cost reduction is pennies, processor ASPs are dollars.

So the leaway you are speaking of are pennies, and you are ignoring the dollars.

Joe