Intel monopoly keeps chip prices down say analysts

[David Farber <dave () farber net>]

Begin forwarded message:

From: "Damien V. Del Porto" <damien () delporto org>
Date: August 26, 2005 9:34:30 AM EDT
To: dave () farber net
Subject: Intel monopoly keeps chip prices down say analysts


Hi Dave,

Thought this article (and the two assertions by analysts below) would  
be good fodder for IP.  The first assertion seems to cover the  
improbable case where AMD wakes up one morning with an extra 30% of  
the market and the second completely ignores any positive benefits  
(in terms of regulating the marketplace) that might accrue were the  
case to be resolved in AMD's favor.  There is a third more-reasoned  
assertion that I think might be true (didn't want to reprint more of  
the article than what is listed below).

Regards,
Damien

"PC companies may like the idea of more competition, but Intel's chip  
choke hold has helped keep the prices down, says Forrester Research  
analyst Simon Yates. If Intel loses a large chunk of its chip  
business to AMD, some of its manufacturing capacity will go unused  
and it will still have research and other fixed costs to meet,  
leading to an overall increase in the costs per chip. This may offset  
any competition benefit, Yates explains."

"Pointing to the $3.2 billion in damages Intel might have to pay if  
it loses the lawsuit, Gartner analyst Ken Dulaney also predicts  
higher-priced PCs. "This lawsuit is a tax on end users," he says.  
"When a new Intel processor comes out, let's say the target price was  
$465 for that chip. So maybe they make it $468 [to pay the judgment  
costs]." The markup to the consumer buying an Intel-based system may  
be a bit higher, though that person may not be aware of it. "One way  
or another, users will wind up paying for it," Dulaney says."

Full Article:
Does Intel's Dominance Hurt Consumers?
By: Carla Thornton
http://news.yahoo.com/news?tmpl=story&u=/pcworld/20050826/tc_pcworld/ 
122249



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