Replies to post #129829 on Intel Corp (INTC)

[Unkwn]

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 think the discussion started about Clovertrail+ which is made on depreciated fabs. Intel only mentioned contra revenue with reference to the tablet market and Bay Trail T. Even the BOM issue was mentioned by Krzanich himself as reason for the contra revenue, thus (depending on whether you trust his words, which can obviously be debated) this is not a proof that Intel can't compete pricewise in the low end market (where the discussion started). Besides that, Bay Trail is fabricated on leading edge 22nm fabs, so no depreciated fabs for a while there.

Anyway, I really would like to know how you position yourself in the market, just to get to know your background. No offense intended!

[wbmw]

FPG, all you're arguing is that Atom can't be accretive to overall margins if part of the cash flow goes towards contra-revenue rebates.

I'm not debating that.

But you're still incorrect - at least in terminology - to call it "effectively selling below cost". It would be like calling MG&A part of product costs, since contra-revenue is no more a product cost component as is the salaries of the sales staff.