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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 215.04+0.1%9:30 AM EST
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To: Road Walker who wrote (47597)7/13/2001 8:43:22 PM
From: niceguy767Read Replies (2) of 275872
 
John:

"AMD's customer won't pay the same price to AMD as they will to Intel. WHY? That's the question you should ask Mr. Sanders."

That's where the 30% market share comes in to play...Perhaps price autonomy can occur only when backed by about 30% market share. I've heard that said about the cell phone sector so why not the microprocessor sector. Below 30%, it's tough to "stick" a price!

Two problems compound the situation for AMD: Weak global demand for processors and even weaker demand for P4's which has resulted in INTC's caving in on P4 pricing in attempt to sway top end purchasers away from the Athlon...but I suspect that the problem is much greater for INTC given the higher cost structure of the P4 and INTC's critical dependence upon the success of the P4...For INTC to be competitive over the next 2 years, the P4 has to fly and, to date, INTC does not appear to have been successful in establishing a successful pricing schedule for the P4 even at 50% of planned q2 pricing and volume targets...Scarey scenario confronting INTC and, unfortunately, AMD may have to absorb some of the negative P4 spillover as INTC continues with P4 loss leader pricing for Dell in q3. Don't think that INTC can play this game for longer than 6 months though before the red makes the INTC financials almost impoossibble to read...So far so good for AMD, though!
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