Elmer,
AMD eeks out a relatively small "gross profit" on their uP sales. Gross Profit is defined as (Sales - Cost of Goods Sold). Therefore, if AMD sold each uP at cost, their gross profit would be zero, increasing their net loss every quarter.
A couple of comments to make. The people who purchase AMD uP assert that the AMD uP is "faster" than an Intel equivalent. While AMD has few Tier 1 vendors for its uP line, AMD has established itself in the "white box" market. However, if the AMD uP is excellent for gaming, why didn't Microsoft chose AMD over Intel? Was it b/c of performance issues? supply issues?
The reason why AMD as a 2nd source will no longer work in the marketplace is b/c Intel has developed a "proprietary" architecture, thus leaving AMD to develop its own. Face it, computer companies, like IBM, HP, CPQ, etc., do not want to be holding inventory. By having two difference uP suppliers, i.e. INTC and AMD, they are forced to have storage facilities (and infrastructure) to support it.
The question then becomes, can AMD survive as being the "premier" supplier to whiteboxes? |
