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Politics : Formerly About Advanced Micro Devices

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To: Gopher Broke who wrote (119746)	7/9/2000 1:18:09 AM
From: Paul Engel	Read Replies (4) of 1573895

Gopher Brain - Re: "Do you have an opinion on whether AMD will be able to sell 7.2 million Athlons in Q4 while maintaining current ASPs" Yes - I have an opinion. My opinion is that AMD's Athlon ASP will have to - and WILL - drop dramatically in order for them to essentially ship as many AthWipers in Q4 as their Q2 total of roughly 4.5 million Kmart-62's and 1.8 million AthWipeys. AMD's OVERALL ASPs, however, should rise, as the per centage of AthWipeys increases. Most of AMD's market is still made up of cheap Kmart-62's - <$60 ASP - and AMD will have to keep dropping AthWipey prices as they attempt to substitute Kmart-62 sales with Athwipers. Another overriding concern is Intel's rapidly increasing volumes of >800 MHz CPUs. As their volumes rise, they will drop prices on existing CPUs as they then introduce ever faster (1.13 GHz) Pentium IIIs in this quarter (Q3). This will put more pressure on AMD to drop their AthWipey ASPs. Then, in late Q3 or early Q4, the Pentium 4 launch will have a dramatic effect on AMD pricing - negatively. AMD will drop AThWIpey pricing dramatically, as they will be once again in the position of competing on PRICE and NOT on performance. Even if AMD manages to launch their Muskrat, that too will be a "limited volume" CPU, and wil have minimal impact on overall AthWipey pricing - especially as the Muskrat will have to compete with the Pentium 4 for media and market attention and customer's dollars. Intel's Pentium 4 volume may not be large, but it will get most of the money from customers who want the best CPU available. AMD will again be left with their mantra - "best price/performance CPU", which translates to CHEAPER and CHEAPER AthWipers. Again, AMD's OVERALL ASPs should climb to above $100, but each AthWipey will drop in price TOWARDS $100 from above. Paul

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