Sunday, July 30, 2006

As we all know, Intel has turned things around with it's Core 2 Duo. However, AMD still has a pricing edge for the time being. Demand for these Core 2 Duo's has far outran supply (it's still a little early) consistently, creating a shortage. Intel's projected quantity supplied is about 500,000 Core 2 Duo's by the official release date, August 7th. Even this seemingly large supply will not be enough to meet demand. This means that most e-tailers have their prices inflated over the MSRP of these CPU's. The law of supply will take hold in this case; suppliers will work to increase the supply. Intel's motivation to boost supply is motivated not by profit-seeking (because the e-tailers are inflating the price, not Intel), but by the need to lower prices to the MSRP in order to solidify competitiveness. Most blogs suspect this equilibrium date to be in mid-August (the official release date of these Core 2 Duo's is August 7th). Interestingly, Intel's efficient production allows the MSRP of these processors to be much lower than the current crop of Pentium D's and Extreme Editions, despite the vast performance improvement. If Intel doesn't drop the prices of the old architecture, the surplus of these NetBurst chips will be even more pronounced. In a month or two, I'm expecting large clearance sales just to clear out this inventory.

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