By: Aaron Spink (aaronspink.delete@this.notearthlink.net), August 5, 2014 2:34 am
Room: Moderated Discussions
Rob Thorpe (rthorpe.delete@this.robertthorpeconsulting.com) on August 4, 2014 1:57 pm wrote:
> When I worked at Dell they used direct negotiation to deal with things like this (the major chips PCs).
> The ODM who makes the machine buys specific lots of chips and pays one (high) price X and passes that onto
> the OEM. The OEM pays it, but also negotiates a rebate which the chip maker pays directly to them. The
> rebate involves lots of negotiation it depends on lots of things; volume, co-branding, use of competing parts
> and all sorts of other things. It's very hard to know what price a large OEM pays for each processor.
>
And just from publicly available documents floating around wrt the anti-trust case, it isn't unheard of for large OEMs to be effectively paying 50% or less of actual list.
> When I worked at Dell they used direct negotiation to deal with things like this (the major chips PCs).
> The ODM who makes the machine buys specific lots of chips and pays one (high) price X and passes that onto
> the OEM. The OEM pays it, but also negotiates a rebate which the chip maker pays directly to them. The
> rebate involves lots of negotiation it depends on lots of things; volume, co-branding, use of competing parts
> and all sorts of other things. It's very hard to know what price a large OEM pays for each processor.
>
And just from publicly available documents floating around wrt the anti-trust case, it isn't unheard of for large OEMs to be effectively paying 50% or less of actual list.
