Replies to post #129703 on Intel Corp (INTC)

[fastpathguru]

Thus, your assertion that contra-revenue allows them to sell below-cost is factually incorrect, as it does not advantage them in pricing for the design win, below the actual cost structure of the device.

wbmw, I U N D E R S T A N D W H A T Y O U A R E S A Y I N G .

Yet, despite the clever accounting (and I'll simply concede your argument and example that "contra-revenue" is simply compensation for a gross competitive deficiency of a product that is equivalent in value to its entire price), Intel has made $0 on the part they sold.

I.e. it was E F F E C T I V E L Y sold below cost. Perhaps it's just those particular words that rub you the wrong way and compel you to restate your rationalization time after time?

To analyse further, I think you're worried that I'm accusing Intel of some kind of inappropriate business practices... I'm actually not! My view in this case is more nuanced; you see, while I think your view that Intel "cannot" sell below cost is effectively BS when contra-revenue can be applied, contra-revenue can only "benefit" to the extent that it compensates an OEM for an Intel deficiency, at Intel's cost. I.e. it's not being used as an unfair advantage over competitors. (Assuming... :)

This is in fact your own argument! But you can't say that out one side of your mouth, and then argue that Intel isn't "giving those chips away for nothing" out the other.

fpg