#PC BOYCOTT
Terry,
I didn't see anything about IBM in the original message. Where did you get this
impression ??? From the thread title ???
Philippe was initially gripping about the 3DO interactive learning machine, and
then he got on to the pentium chips. I don't really know anything about the 3DO
machines, but I do know something about the pentiums. And one of the things I
do know about them is that Intel spent a coupla' billion dollars in research,
design and development for both the chip and the cells in which to manufacture
it.
Even at $475 a pop it still takes a lot of units and a long time to recoop a
billion dollars. But since you do have that BA in Economics, let's do this a
little smarter. The retail price of the pentium (in it's various and sundry
incarnations) is about $500. Intel may get $200 of that $500, as the
distributor and the retailer have to get their cuts too. So if we assume that
the actual production cost of the chip is $25 as stated by Philippe, that
leaves them with $175 per unit to cover costs of marketing, overhead, expensive
executive salaries, stock dividends, development rebates and all those other
little nagging things that cost money to run a company.
But let's be generous, all that other stuff only adds $75, so they actually get
a return of $100 per chip to pay back the costs of development and
manufacturing facilities. Gee…according to my calculator, it will take only
10,000,000 chips to recoop a billion dollars at $100 a pop.
And they ain't made a profit yet.
Do you really have a BA in Economics ??? If you had a customer that said he
wanted to purchase 1,000,000 units directly from you, would you sell those
units to that customer for the same price as a single unit from a retail outlet
??? That would be price gouging on a grand scale. Not only would you be making
your normal profits from each unit, but you would also be raking in the costs
and profits of the wholesaler and the retailer……not bad.
And if the research costs aren't paid by someone, who's going to research and
design the next generation of chips ??? Are you going to do it ??? Do you have
a coupla billion to throw away on the next generation ??? If you did, would you
not want it back, and with a very good INTEREST ????
These companies aren't altruistic, liberal entities. The government isn't going
to spread it's largess over them in the form of free dollars. They are in
business to make a profit, which makes them capitalistic in the true sense of
the word. And the profit they make has to be better than interest paid on a
savings account, or there is no sense in gambling all that money.
And do you really think that Hertz pays General Motors the same price per unit
you do when you purchase a car from your local dealer ???
Get real !!!!! Use the knowledge that degree is supposed to represent. Don't
just wave the piece of paper around. And don't think for one minute that the
pro rated cost of development isn't included in the price of each and every
single chip they sell whether it's in units of one or a million.