> Enrique, I noted at least the following pts (response based on a 3 minute
> conversation with a senior microprocessor engineer whom I shall not name
> since I may not have understood him properly--rushed conversation):
>
> 1. high end users already served; move to cheaper $500 computers which
> won't allow for big mark-ups henceforth--though of course there may be a
> new bout of superprofits for software vendors as pc's proliferate.
>
> 2. Intel now facing competition, though from mostly American companies (via
> excepted)/ Profit margins will be no more exceptional in the microchip
> business than the potato chip business--"the MPU business won't be worth
> competing for"! _____________________________
>
> True enough. Intel in litigation with Via now over dumping. Shows that
> catch-up has been a truly important development in the last two-three
> years. I'll need to look into this foundary/fabless design company div of
> labor.
>
> Points 1 and 2 seem however to ignore the next round of "high value added"
> product: system on a chip integration by which total chip count will be
> reduced. Should be a burgeoning market in telecom (hardware and software)
> and appliance intelligence--big future market not just internet via pc.
>
Perhaps. He seems to be conceding that Intel's current model (make fat profits by getting business and consumers to replace their computers with high-end, high-margin CPUs every two or three years) is gone. Systems on a chip may or may not be a replacement for that. I am skeptical - at best it means Intel will capture an increasing share of the decreasing PC cost. Appliance intelligence strikes me as a very iffy proposition: a solution in search of a problem.
The main issue remains: Intel's source of monopolistic rents, well-heeled customers who demand top-of-the-line performance that only Intel can deliver, is gone. It remains to be seen whether they can replace it.
>
>
> 3. microprocessor industry can't easily be cartelised.
>
> Been a bout of joint ventures though including across national boundaries.
>
Yes, but as long as there are two or more suppliers of essentially identical products at near-zero marginal costs, I don't see how cartelization can work very well.
>
> 4. a new broader question of my own: do any technology monopolies enjoy
> superprofits?
Can't answer that.
>
>
> yrs, rakesh
-- Enrique Diaz-Alvarez Office # (607) 255 5034 Electrical Engineering Home # (607) 272 4808 112 Phillips Hall Fax # (607) 255 4565 Cornell University mailto:enrique at ee.cornell.edu Ithaca, NY 14853 http://peta.ee.cornell.edu/~enrique
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