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Politics : Formerly About Advanced Micro Devices
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To: Process Boy who wrote (73928)10/5/1999 8:44:00 AM
From: Dan3  Read Replies (1) of 1572561
 
Re: the same bin split vs. launch rules...

With the benefits of having nearly all of that 5%-10% high end of the market where all of the profits are made, come some drawbacks. If Intel does a low quantity launch of a top speed grade, it will cannibalize its own high revenue sales as high end customers order unavailable top speed parts that can't be shipped for months (until volume picks up). So Intel can't have a low volume launch without significantly reducing total revenue and drastically reducing profits. AMD doesn't have this problem (other than in its dreams, at this point).

For AMD right now, there are probably dozens of delayed or lost high end Intel sales for every delayed or lost high end AMD sale due to the low quantities available of 650s and 700s (relative to what Intel would consider an allowable launch volume). In fact, AMD may be producing close to the optimum number of high end chips at this point. As experience and confidence is gained with AMDs new platform, acceptance of it will grow at the high end. If acceptance and production grow at the same rate, AMD will be able to keep total revenue and profits maximized - such an ideal match is unlikely, but it appears to be working out nicely, so far.

Dan
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