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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 213.50+6.2%3:59 PM EST
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To: AK2004 who wrote (51498)8/17/2001 7:52:04 AM
From: Road WalkerRead Replies (2) of 275872
 
Albert'

interesting observation about difference in pricing of various amd systems. It reminds me a 2nd hand story from Harvard business school (I did not go to Harvard nor did I study business) that was taken from real life and it tells the story of a store owner who was trying to compete against 2 newer stores close by. Since he was not getting that many customers he kept lowering prices and finally he hired consultant who told him to increase the price of his goods so they would be 20% more expensive than competition. He was just about to go out of business and having little to loose he increased the prices. In a little while his store became more popular than competition since everyone thought that his goods are better because they are more expensive.

As long as AMD chips are priced 25% lower than Intel chips, the consumer will think that Intel chips are 25% better. AMD might take a small share hit by moving their price towards parity, but the extra GM dollars might make up for it.

Wouldn't it be interesting if we had a reverse price war, AMD raises it's price... Intel raises it's prices... AMD again raises it's prices... Never happen, but a nice fantasy.

John
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