🚀 go-pugleaf

 >  It's surprising how Intel and all of the dough that they have still sell
 > their processors at outrageously high prices. They could probably sell a
 > most of their chips for far less that AMD or Cyrix sells their and still
 > make a profit. A PII 233 costs more than a K6-2 300 and with the new
3DNow
 > instructions the K6-2 smokes a PII-233, and as an added bonus is faster
in
 > most other stuff too. At the way Intel prices their processors, a 500
might
 > cost about $900 to $1100 if not more. An AMD K6-2 might cost about $300
at
 > 350Mhz, $430 at 400, and $552 at 450Mhz, but as we all know AMD does not
 > exponentially overprice their new processors as Intel does.

Once the design costs are taken out, a CPU probably costs less than 50 cents
to make.  By asking the big bucks for the "latest greatest" chips, Intel is
recovering the design costs from the people who insist on having the current
top of the line.

It's correct to say that Intel could still make a profit at lower prices,
but the fact of the matter is that it's doubtful that they'd sell twice as
many chips at half the price.  Since chips are almost 100% profit, that's
what would have to happen to justify lowering the price.

Intel probably has a pretty good grasp on the economics of the situation. 
AMD, Cyrix (etc) also have their own "take" on the market, and the next year
or two will show us who guessed right.

One thing to remember is that history has shown us that companies who
compete on price generally go out of business fairly quickly.  The best
thing Joe Consumer can do is to financially support whoever he feels will be
best for him in the long run.  The forces of the marketplace will take it
from there.