Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 215.32

-0.2%

Dec 30 3:59 PM EST

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To: AK2004 who wrote (50033)	8/6/2001 11:38:09 AM
From: niceguy767	Read Replies (1) of 275872

albert: "In an aggressive move to take back market share, we believe Intel is planning to detonate a price bomb on AMD by cutting prices about 50% on high-end PIV processors. Since the beginning of the year, Intel has been aggressively pricing its products in order to stimulate demand and to fend off market share losses to AMD. However, AMD has counter-attacked by narrowing the megahertz gap and introducing processors at comparable speeds at aggressive prices. In fact this trend started in mid 1999 with the launch of AMDs K7 product. As a result, we estimate that AMD increased market share of the processor market from 13% in Q2:99 to 16% in Q2:00 and to 21% in Q2 of this year with a stated goal of 30%. As AMD has narrowed the gap, we estimate that AMD has seen ASPs that were $70 two years ago at $76 in the just completed quarter while Intel has watched ASPs decline from $206 to $164 during this same period while giving up 8 points of market share. In addition, AMDs recent goal of gaining 50% retail US portable market share by year-end will expand the price war on the desktop to the portable market which is much more profitable." AMD's new product intro's on the mobile and server/workstation spaces will mitigate, to a degree, the effect of any price war as these are "new" and "incremental" revenues...At the same time these new AMD product intros might accelerate the already accelerating erosion in INTC ASP's as INTC will no longer command the fat margins it has grown accustomed to in the mobile and server/workstation spaces. INTC's declining financial strength which we have witnessed over the past 2 years owing to AMD's successful foray into the consumer space with its "spry Athy" may not be a short term "event" if AMD encounters the degree of success in gaining market share in the new mobile and server/workstation spaces that they have enjoyed in the consumer space...Nothing, but nothing to date, suggests that AMD will encounter any lesser degree of success in these spaces than they have in the consumer space with the "spry Athy"... INTC has never had to weather relentless competition the likes of the current AMD...and INTC's recent increasing rate of production problems combined with its seeming inadequately qualified competitor, the P4, has exposed INTC's vulnerability like it has never before been exposed!

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