Scumbria,
There has been little indication so far that Intel will be able to keep up with AMD clock rates. AMD can set the prices now.
This isn't about clock speeds -- this is about business. As an extreme example, suppose Intel cut prices on all of their PIIIs to $10 per unit. How many processors do you think AMD would sell then? Even if they have faster clock speeds, everyone would buy PIIIs. So they'd have to match the price cuts to a large degree.
Obviously Intel isn't going to drop the prices to $10, but they certainly could drop prices far enough that AMD would have to respond dramatically. I'm sure the Intel people can estimate very closely the cost of making the Athlons and could set the prices such that AMD goes back to operating in the red. But since Intel has many other lines of business, and since they probably have lower processor production costs (my guess based on higher production volumes), their bottom line would only suffer a little. If AMD goes back in the red, though, then they can't hire as quickly, they can't get credit lines as large as if they're profitable, etc., etc., etc.
As you think about this scenario, the real question is "can Intel afford to let AMD get a significant foothold in the high end of the processor market?" The answer is no, and if short term they can't beat AMD with technology, they'll find other ways to do it.
Dave |
