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Politics : Formerly About Advanced Micro Devices
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To: Tenchusatsu who wrote (122802)8/22/2000 1:35:53 PM
From: Joe NYC  Read Replies (1) of 1578927
 
Technusatsu,

The economics of self-destruction at work again. If this is true (and I doubt it), then AMD is once again sacrificing their own potential profits just to hurt Intel.

I don't agree with combjelly about AMD's motivations for cutting prices. I think it is about selling all their products at attractive prices.

AMD is pushing the upper limit of how much AMD product the market will accept, especially in the high end. If there is demand for only 500,000 $800 parts and AMD has 2 million that run at speed of current $800 MHz part, should AMD sell 500,000 $800 parts and downbin the rest? Or just not sell them?

This seems to be the implication of most of the Intel longs. I understand the motivation, since such a strategy (downbinning) would help Intel (AMD's competitor) and screw AMD's customers.

I am glad AMD stopped the practice of downbinning and cut prices to the level where supply meets the demand, and where the maximum revenue can be achieved. As a result of selling CPUs at the rated speed, the customers get more value of their money. The fact that it happens to screw AMD's competitor is a collateral damage, not a primary motivation.

If AMD were able to supply 50% or more of the market, you could look for ulterior motives. But AMD is too small and too irrelevant to cause Intel any grief.

Joe
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