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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 210.78-4.8%Dec 12 9:30 AM EST
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To: Charles R who wrote (4872)8/13/2000 8:48:15 PM
From: Jim McMannisRead Replies (2) of 275872
 
RE:"Frank makes a point about aggressive pricing affecting the stock price and Frank is on the mark. AMD will gain market share as a result of the drop and that will help AMD make up for some of the lost sales from Duron. But a lot of people may not see it that ways. It is all about perceptions in this business and some folks out there perceive the price drop as a price war that will kill AMD."

Well, yes and no. Wall Streets knee-jerk reaction to price cuts initially draws scrutiny over reduced margins and profits. OTOH, seems pretty customary to drop prices in the speed chain when you introduce a new speed grade. And at time you lop one off a the lower end. If AMD is just dropping prices without a new speed grade I'd be more concerned and even then I've fully expected AMD to put the screws to Intels pricing model as soon as they started to ramp up from Dresden. After all, they have a lot more chips to sell AND they want more market share.
If AMD is realistically a couple speed bins ahead of Intel then it shouldn't hurt their ASPs that much. If Intel can't keep up we will see the gulf between Athlons sweet spot and P3s sweet spot that we knew existed all along.
Up 'till now there was no reason for AMD to do anything but match Intels speed and prices...
Now we will see what P3 really has left in the tank. I suspect Intel had figured out what was going to happen and the P3-1133Mhz was some kind of ploy.
Jim
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