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Archived from groups: comp.sys.ibm.pc.hardware.chips (More info?)
Del Cecchi wrote:
> Actually IBM saved Intel's bacon long about the time they were "figuring
> it out". And Intel wants high margin business, that's why they allegedly
> abused their market power. And don't forget to cogitate on why Intel
> switched from x86 to Itanium (well, tried to), too many cross licenses
> laying around from back in the day.
Itanium was an attempt to capture high margin business and to free
Intel from the entanglements of cross-license agreements. No confusion
there.
> If Intel could get the same revenue
> with 1/3 the capital expenditure, don't you think they would? What
> prevents Intel from charging double the current price list?
>
They destroy their own market. Even without competition, there is a
selling price/profitability calculation that doesn't put the highest
profitability at the highest selling price. Making computers much less
expensive vastly expanded the market for computers and made many
wealthy, despite the fact that computers were being sold for a much
lower price.
> Clearly Intel has a dominant position and exercises its market power to
> preserve it. The question is are those actions a violation of US law?
> The Sherman Act?
>
> For example " Robinson-Patman Act, passed by the U.S. Congress in 1936 to
> supplement the Clayton Antitrust Act. The act, advanced by Congressman
> Wright Patman, forbade any person or firm engaged in interstate commerce
> to discriminate in price to different purchasers of the same commodity
> when the effect would be to lessen competition or to create a monopoly."
>
But now we're off into a completely different topic (from business
models to law), and not one that I'm very interested in arguing about.
RM
Del Cecchi wrote:
> Actually IBM saved Intel's bacon long about the time they were "figuring
> it out". And Intel wants high margin business, that's why they allegedly
> abused their market power. And don't forget to cogitate on why Intel
> switched from x86 to Itanium (well, tried to), too many cross licenses
> laying around from back in the day.
Itanium was an attempt to capture high margin business and to free
Intel from the entanglements of cross-license agreements. No confusion
there.
> If Intel could get the same revenue
> with 1/3 the capital expenditure, don't you think they would? What
> prevents Intel from charging double the current price list?
>
They destroy their own market. Even without competition, there is a
selling price/profitability calculation that doesn't put the highest
profitability at the highest selling price. Making computers much less
expensive vastly expanded the market for computers and made many
wealthy, despite the fact that computers were being sold for a much
lower price.
> Clearly Intel has a dominant position and exercises its market power to
> preserve it. The question is are those actions a violation of US law?
> The Sherman Act?
>
> For example " Robinson-Patman Act, passed by the U.S. Congress in 1936 to
> supplement the Clayton Antitrust Act. The act, advanced by Congressman
> Wright Patman, forbade any person or firm engaged in interstate commerce
> to discriminate in price to different purchasers of the same commodity
> when the effect would be to lessen competition or to create a monopoly."
>
But now we're off into a completely different topic (from business
models to law), and not one that I'm very interested in arguing about.
RM