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Politics : Formerly About Advanced Micro Devices
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To: greg nus who wrote (26740)12/14/1997 10:18:00 AM
From: Bill Jackson  Read Replies (1) of 1576038
 
Greg; The price reductions that Intel made are what is called a 'fire break' strategy. It is quite true that Intel could easily have kept the prices at 1996 levels, and made a huge amount of money. In that case AMD would also have made a lesser huge amount of money, and be able to ramp up faster and better. So you deny the enemy all that profit so that later you keep your quasi monopoly. From Intels point of view it was a failure and a success at the same time, as when they burned AMDs profits (hurting and possibly killing AMD) they burned far more Intel profits(merely hurting Intel). From the SH point of view it was a failure as share price fell, and many were hurt. However the correct strategy was to recognize this fire break strategy when it started, and take the future price drop of Intel shares into account, and profit from the decline and re-enter later after AMD is flattened(if ever). However the unexpected alliance that Cyrix made means that Intel must do it again with a more powerful opponent, and that strategy does not work as well against a deep pocket opponent like NS.
The new NS might just buy up AMD if it gets into trouble, and that would be worrying to Intel as NS has foundries and money.
Looking down stream is the new proprietary slot package working out?, or is it getting end run?

Bill
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