Message to Toni Beckham: (covers both the memory idea and the MHz idea)
Dear Toni,
As a shareholder of AMD (2600 shares) I thought of a sales/marketing idea that will greatly enhance the ability of AMD to compete against the new Pentium 4 processor and maintain or increase ASP's.
Basically, it is very much in AMD's interest to "raise the bar" on the amount of memory shipped with PC's from 128M to 256M for Athlons, and from 64M to 128M for Durons. The reason, of course, is that RAMBUS, the memory used in P4's and in a lot of business PC's is extremely expensive, but PC133 memory, even for high quality Micron brand is only $79 per 128M or even less at the wholesale level.
I suggest a co-marketing campaign with radio / print / TV ads going something like this:
"Now, until January 1, buy an AMD Athlon system at your local participating retailer, and AMD will add an additional 128 megabytes of high quality Micron memory for free. Or buy an AMD Duron system and we'll add 64 megabytes of Micron memory for free. See your local participating dealer for details.
Perhaps it could be co-branded with Compaq, HP and or Micron Electronics, i.e., "Now for a limited time all [Compaq, HP, Micron] Athlon PC's come standard with 256 megabyte of RAM memory at no additional cost."
The co-branding idea with Micron makes sense because 1)they will benefit and 2)it will make the Rambus shortage much worse.
The results of such a campaign would be 4-fold:
1. AMD PC's will appear to be better buys than Intel-based PC's. The price of SDRAM is so cheap that prices would barely have to be raised.
2. If Intel tries to match the offer, the price of Rambus memory will skyrocket, making even the 128M P4 PC's more expensive.
3. If Intel tried to match the offer just on its Pentium III PC's, they would be in the ridiculous situation where their P4 PC's have half the memory of their PIII PC's. Potential P4 customers would want to upgrade, making the Rambus shortage worse like (2). Therefore, Intel will NOT try to match the AMD offer, and Intel PC's will appear to be inferior to the AMD PC's.
4. Micron is a strategic partner of AMD, especially with their DDR PC's and chipsets, and would like nothing more than to see baseline PC memory increase. Therefore Micron might give a good deal on the cost.
5. Increased demand for SDRAM will further ciscourage RDRAM production. Intel will experience severe shortages of RDRAM in Q1'2001 and Q2'2001 as they ramp the P4.
The whole goal of getting the OEM's to increase the standard memory is because we know that Intel doesn't have a PC133 solution for Pentium 4's for a year (six months if VIA is successful earlier). P4 PC's will simply be UNSELLABLE if 256M is the standard.
Another way to get 256M to be the standard memory configuration would be to simply offer the advertising promotion for free to the OEM's that go along. Or, let them to the advertising and just subsidize them by $20 per PC.
In short, due to the inability of Intel to respond, I think this is an awesome idea, just as raising the bar on MHz was. AMD is yielding a huge number of 1 GHz processors compared to Intel and that is why AMD has been trying to push the average MHz level up. By a similar token, AMD should be raising the bar to 128M for budget PC's jand 256M for high-end PC's, for their basic memory configuration.
I have one further thought -- that AMD should come up with a slogan to advertise the fact that the AMD processors are the fastest even though they might have less MHz. Perhaps something like:
"Other companies have higher numbers..."
[Flash signs of 1500 MHz, than a sign of $2,500, followed by the buyer fainting]
"AMD Athlon computers have higher PERFORMANCE"
[show a racing car whizzing by and receding into the distance]
[show the letters of P-E-R-F-O-R-M-A-N-C-E then
[spoken and written] "AMD Performance Computing, a trademark of
Advanced Micro Devices."
[fade up the AMD and Athlon logo with musical jingle, how about the first four notes of Beethoven's fifth, on bells]
John Petzinger (xxx)xxx-xxxx
****************** end of email
Petz |
