Intel Corp has clearly concluded that demand for microprocessors will be inelastic for the next six months, and that it will sell more or less the same number of Pentiums regardless of what it charges for them, within reason. Accordingly, in order to maximize its returns, it plans to pass on the November price cut it had penciled in – the first time it hasn’t made across-the-board microprocessor price cuts in five years. Confirming a Wall Street Journal story on Friday, the company says it plans to modify its pricing policy to provide a more stable environment during the fourth quarter selling season. The rationalization it has come up with is that OEM customers and retailers have found it disruptive to have a microprocessor price reduction during the key selling period of the year because it has served as a disincentive to carrying inventory and stocking distribution channels adequately. It it will therefore lower prices on some Pentiums more than previously planned in August, and then hold those prices through the end of 1996 – but it warns that its pricing policy is subject to change. Intel said the price cuts would not affect the cost of its Pentium Pro chips. It gave no details of its intentions, and judging by what is coming back from the field, the statement was a little disingenuous: one computer manufacturer told the Journal that the 166MHz Pentium had been scheduled to drop to $280 in November, but that under the revised plan, it will remain at its summer price of $380 until February, when it will drop to $275. Under Intel’s original plan, it would have cost $250 by then. Intel would not say Friday what its exact price cuts would be, but hinted that the prices in the Journal were a bit low, Currently the 166MHz is $498 – about twice that.And Intel did acknowledge that the move will mean a significant jump in revenue for the December quarter, and while some of the planned November price cuts will be moved up to August, as many as two-thirds will be pushed back to February, Intel admitted. The move also means that the cloning gang led by Advanced Micro Devices Inc, Cyrix Corp, and even IBM Corp, are still regarded as paper tigers. รก