Quote Originally Posted by Chad Boga View Post
If the worry over loss of market share is lessened as you say, wouldn't Intel then already being currently pricing their CPU's at just below "breaking point", so that they maximise their profits?

I would suggest that to then try a further increase would change the dynamics beyond what the rebates can achieve.
Remember what these anti-competive rebates are about. They mean that if you do not sell only Intel the rebates are removed thereby making your Intel products costs hugely inflated. Inflated to such a degree that you go out of business. So going out of business versus another 10% of costs/price increase?

Further to your earlier point.... a companies profit structure can be composed of several things other than just Fixed, and Variable costs. A good Marketing and FInance team will very easily come up with stress tested pricing srtategy that can allow short term drops = long term market share.

It can be a tradeoff for example.... make 3% more profit this year... but risk loosing market share by 1% each year for the next 3 years by not enforcing anti-competitive rebates. Sure profits will be better now... but in 5 years and beyond, market share might be hurt. You get the idea.