Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 214.02

+0.2%

2:12 PM EST

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To: Road Walker who wrote (46367)	7/6/2001 2:53:26 PM
From: Charles R	Read Replies (1) of 275872

<I'm curious what the consensus is here. Should AMD forget about market share, and manage their business towards an acceptable gross margin? Charge what they think is a fair price, regardless of what Intel is charging. They would obviously lose market share. But there are plenty of AMD loyalists, so they would continue to sell product. Maybe 35% less units with double the GM, and with lower overhead.> That business model will kill AMD in the long term. Even in this quarter, I estimate AMD had about $100M positive cash flow (as opposed to Intel which has been burning cash). As long as there is positive cash flow there aren't too many good reasons to not go for market share. Over the long term it is much more difficult for Intel to dislodge a 25 or 30% market player than 15-20% market player. <Sort of an Apple business model. > And, clearly Apple is a very good example of why not to follow that business model. In general, it is a bad idea in semiconductor or software sector to cede market share.

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