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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 210.78-4.8%Dec 12 9:30 AM EST
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To: Sarmad Y. Hermiz who wrote (193769)4/14/2006 11:30:47 AM
From: combjellyRead Replies (1) of 275872
 
"Approx 200m computers were sold in 2005. Right ? 40 m AMD and 160m Intel ? Intel's PC rev was $27B."

Let's use real numbers. In Q405, Intel sold $7.329 billion in microprocessors.

intel.com

Let's take your 40 million processors number. That gives an ASP for processors of $183.23. Now if the ASP is dropped to $120, that lops $2.529 billion off of their bottom line. i.e., they would have been right at break even. Every $10 increment below that means bleeding another $400 million.

Ok, let's look at price lists.

intel.com
amd.com

Intel's lowest priced Celerons are the 326 and the 325 at $69. The 341, which Tiger Direct has for $39.99 lists for $89, quantity 1000. Why the price differential? Because Intel has had to cut prices way below official to move product. The OEMs can't sell them in systems, so they are dumping, big time, into the gray market. That is happening a lot less with AMD. We know that at least some OEMs are getting low prices for AMD processors, yet they aren't getting to the gray market in anywhere near the low prices that Intel parts are showing up at. Which means that Intel is blowing them out really cheap and/or OEMs are trying to dump stock they can't sell at any price.
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