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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 214.51

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To: Road Walker who wrote (57022)	10/3/2001 1:15:21 PM
From: andreas_wonisch	Read Replies (1) of 275872

John, Re: And if MHz didn't mean anything to the consumer, then they wouldn't be paying higher prices for higher MHz. They don't. The pay higher prices for PCs with better equipment (which happen to be faster because the OEMs differentiate their PC models by clock-speed; or do you really thing a 1.4 GHz P4 and 1.5 GHz P4 could be differentiated by CPU price alone? That difference is in the low double digits dollar range). Just ask Joe average what's important for him when he buys a new PC. What do you think he'll answer? Do you think he'll say that he wants a PC with high clock-speed? Or a PC that is suited for his needs and does everything that he wants it to do? One of my friends told me this weekend that he wants to buy a new PC because his old one doesn't run some Internet applications any more after he upgraded to DSL. And it's old anyway. (his words!) I asked him what CPU was in its current PC. He didn't know. I told him when buying a new PC he should go for an Athlon instead of an Pentium 4 because it has a better price performance ratio. He starred at me very confused. Then he told me that he knew a PC vendor very well and would just buy what he recommends him at his shop -- as long as it was below a certain price. That's Joe average who buys PC at retail or screwdriver shops. They just want a PC that works and is suited for their needs. They couldn't care less if it's clocked at 1.5 or 2 GHz. Don't confuse Joe average with people like us. Or with a professional buying PCs for his company. The new performance rating is not for the latter. They know better anyway. It's just a new way to get AMD processors to certain price points above the low budget PC market. It worked before as witnessed by Cyrix' initial success and it might work again. Assuming you were buying a product you knew very little about, what would you prefer, an industry standard specification, or a manufacturer's discretionary rating? Probably both metrics wouldn't say anything to me. I recently bought a new TV set and I informed myself thoroughly on the Internet before doing so. But there were still some specifications that didn't say anything to me. In the end I asked a friend about some recommendations and then just bought the TV set that I was comfortable with, that was at my price point and that suited my needs (e.g. I wanted three SCART ports and only few models have so many). For Joe average buying a new PC is nothing different from buying a TV. With the sole exception that buying a new PC is probably even more difficult since he can't test it out before. Edit: Just a quick addition: I don't say clock-speed doesn't mean anything. It's probably the only metric that some uniformed people have heard of before. But it's influence on Joe average's buying decision is vastly overestimated IMO. Andreas

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