Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 217.97

+0.9%

3:59 PM EST

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To: SteveC who wrote (74560)	3/15/2002 5:02:58 AM
From: fyodor_	Read Replies (1) of 275872

Steve: Why doesn't Intel just raise prices? It will lose some marketshare to AMD, but gain substantially more in revenue for 2002. With only two players in the market, and one dominant, Intel can easily manipulate the price of chips up or down. If it thought it could slowly suffocate AMD, it was wrong. Intel ought to take the money and run. It is critical for Intel to keep AMD's market share as low as possible. This is the surest way to optimize profits in the long run. For AMD, the inverse is true (i.e. gaining market share). The reasons are simple: Name recognition and infrastructure support. (Not to mention that any increase in profits AMD gets allows them to either diversify, increase R&D, increase capital expenditures etc.) If AMD only has a 20% market share, companies who make motherboards and chipsets need Intel. Starting off by closing yourself off from 80% of the market would not be advisable ;-), so these players need licenses etc. from Intel. This, in turn, gives Intel some amount of influence, but even more basic than that: Where should a chipset company focus its R&D? On the segment that reaches 20% of the market? Or the segment that reaches 80% of the market? All the while keeping in mind that the R&D expenditures would be roughly equal&#133 -fyo

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