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Politics : Formerly About Advanced Micro Devices
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To: Road Walker who wrote (122608)8/21/2000 3:28:00 PM
From: kash johal  Read Replies (1) of 1576951
 
John,

re:"Most folks on the AMD thread seem to think that no matter how many microprocessors AMD makes, they can sell them, if they just lower the price. That's not true. Retail demand is finite, there will only so many thousands of PC's sold to consumers in the 3rd and 4th quarters. Consumer demand is slightly elastic based on price, but prices are going up or staying the same. Retailers are reporting soft sales. There are a lot of competitive products to PC's this year. I think retail PC sales will be flat or down vs. 1999"

You seem somewhat ignorant of classic marketing theory.

Clearly lowering prices does spur demand.

There is market elasticity based upon price.

This is generally accepted economics 101.

AMD does very well selling all it can make with an average ASP of $100.

With average ASP last quarter of $93 margins were in 50% range.

As ram goes on chip - costs come down margins go up.

If AMD needs to price 1Ghz chips at $250 to move them more power to em.

regards,

Kash
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