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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 227.90+2.0%3:59 PM EST
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To: economaniack who wrote (191632)4/2/2006 1:55:32 PM
From: Cravey of 275872
 
Economaniack,

I believe you hit upon the great opportunity available to AMD. If Turion X2 volumes are available with the ramp of Fab36 and Charter coming online, it is time to blow a freight train sized hole in Intel's prize possession, the notebook processor profit profile. Intel's operating margin in the mobility segment was over 50%. Their core duo products are list priced from $241 to $637 per unit.

AMD has the opportunity to be Intel's worst nightmare and improve their own position at the same time. If (and it is to be proven yet) the Turion X2 is available in high volume it could be priced from $150 to $400 and used as leverage to protect other segments. This is exactly what Intel has done in the past to AMD but in reverse. It works due to the low market share position (relatively) AMD finds itself in in the laptop segment and in particular, the enterprise laptop segment. As it is difficult to segment consumer vs enterprise, one processor can go wherever required for OEMs, Intel ends up having to price across the board.

On top of that, these prices would serve to actually increase AMDs ASP while reducing Intels. AMD continues to push the 64 bit capable message until Merom shows up and has at least six months of clear sailing. Think this thought may have occurred to the folks in Austin?

Cravey.
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