Charles,
Gaining market share and losing money is not a sustainable business plan. It's pretty simple, you eventually go broke.
It's dead end. Why not charge the same price for an equivalent cpu as Intel does? Would AMD then lose all their business, I don't think so, if you do, you don't have much faith in AMD products. Would they lose a few points of share in the short term, probably. In the longer term, would people buy AMD products because they were cheaper, or because they felt they were better? Would Intel have more of a tendency to raise their prices, improving GM's for both companies?
Going up against a company with 75% +/- market share, and the economies of scale, and marketing dollars that implies, by selling at a significant discount, it just won't work.
Charge the same as Intel, make a few bucks on each processor, invest the bucks in building brand preference. It takes longer, but it sustainable. Consumers like to buy products from companies that say "buy from me 'cause I'm better", not from companies that say "buy from me 'cause I'm cheaper".
It's an idea, anyway. Not very original, it's how almost all great companies were built.
John |
