Path: utzoo!attcan!uunet!crdgw1!uakari.primate.wisc.edu!aplcen!haven!uvaarpa!murdoch!shamash!clc5q
From: clc5q@shamash.cs.Virginia.EDU (Clark L. Coleman)
Newsgroups: comp.arch
Subject: Re: AMD vs. Intel Arbitration
Message-ID: <1990Oct25.210840.3466@murdoch.acc.Virginia.EDU>
Date: 25 Oct 90 21:08:40 GMT
References: <2780@crdos1.crd.ge.COM> <1990Oct25.141449.420@murdoch.acc.Virginia.EDU> <2791@crdos1.crd.ge.COM>
Sender: news@murdoch.acc.Virginia.EDU
Reply-To: clc5q@shamash.cs.Virginia.EDU (Clark L. Coleman)
Organization: University of Virginia Computer Science Department
Lines: 49

In article <2791@crdos1.crd.ge.COM> davidsen@crdos1.crd.ge.com (bill davidsen) writes:
>
>  Intel has a monopoly the same way Ford does. Intel makes the 386,
>Ford makes Ford cars. In both cases the big buyers have price contracts
>before the buy decision is final, and Motorola and Chevy are still in
>business. Monopoly pricing only applies if you have no competion with
>similar products. And who else makes the 680[34]0 to protect Apple? Not
>even Motorola if they don't settle with Hitachi (or have they).

Brilliant. You have just proven that the MUCH higher profit margin that
Intel enjoys on the 80386 as compared to the 80286 is an illusion, or
that its apparent correlation to the competition from AMD and Harris
on the 80286 is an illusion. Better inform all those writers across the
financial and electronics industries (Wall Street Journal, EE Times,
you name it) who think that the 80386 pricing reflects the fact that
Intel is the sole source.

Your confusion seems to result from the apples to oranges comparison you
made with cars. There is no compatibility issue with cars. I can trade
in my old Ford for a Chevy when it is time to upgrade -- no big deal.
If I am purchasing computers for a large corporation and we need to
upgrade our CPU power from our current 80286 machines, changing to a
different proprietary system (Apple Macintoshes) is not justified by
the fact that Intel charges, say, $125 for a certain 80386 chip that they
would sell for $50 and still make a profit IF there was an AMD that
forced them to do so. That extra $75 wholesale adds a couple of hundred
dollars to my system cost, but the cost of conversion to an Apple is
pretty high.

Your definition of "monopoly pricing" seems to be so extreme that you
think that Intel doesn't enjoy monopoly pricing on the 80386, because
they can't charge $2000 apiece instead of $125, as the market share
loss would make it a self-defeating move over the long run. By the
same extreme definition, OPEC pricing of oil is not an example of
monopoly pricing, as there are alternative energy sources that become
viable at some oil price level. Can you give a single example in the
history of the world that fits your definition of monopoly pricing?

P.S. Don't argue economics with me on the net and then tell me to 
take it to email. If you want to keep embarrassing yourself on the
net by posing as an economist, go right ahead. If you can't take
the heat, don't  start the thread in the first place by claiming
that AMD's second sourcing of the 8088 wasn't significant in the
early 80's when IBM designed the PC.


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"We cannot talk of freedom unless we have private property." -- Gavriil Popov,
Mayor of Moscow, September 11, 1990. |||  clc5q@virginia.edu