Thursday, December 29, 2005

Why should INTEL cut discounts for DELL?

I suggested that INTEL should eliminate rebates and discounts based on volume and AMD quota and establish a uniform pricing scheme to encourage wider adoption of INTEL CPUs. There is an additional reason why INTEL should cut rebates for DELL.

DELL's main business is in corporate, a market where INTEL is preferred. However, DELL uses the threat of going AMD in consumer to get better and better deals and pay less and less for INTEL CPUs. DELL is draining INTEL's life blood.

If INTEL cut rebates, those corporate customers will continue to pay whatever higher prices for their INTEL desktops. The end result is more revenue and profit for INTEL.

INQ reported that INTEL is terminating the "Intel Inside" program. Maybe INTEL will do what I suggested here. We will see soon. But I really don't think INTEL has an alternative. Keeping DELL happy is hurting INTEL itself.

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