Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 253.73

+1.6%

Jan 22 3:59 PM EST

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To: Magrathea who wrote (196633)	5/14/2006 8:13:20 PM
From: grimes	Read Replies (1) of 275872

Magrathea re: "...they'll have to be ahead in Performance/$ by lowering price, just like old days. Profitablilty will suffer horribly, of course...". It doesn't necessarily follow that lower prices will cause profitability to suffer. Consider WalMart who sells everything for less than just about anyone else and makes (ever increasing) boatloads of money. Honda sells cars for less than Rolls Royce - which company would you rather own? Suppose AMD's ASP drops to $ 75 vs $150 for Intel. If AMD sells 100 million chips per year - possible it seems to me with their current structure - they will have revenue of $7.5 billion and be making serious profits. As long as they don't have gaping holes in their product line for Intel to beat on who cares if Intel has a performance bracket at the top. Return on assets and return on equity is what should matter to shareholders - by these measures I predict Intel will not come close to AMD anytime soon.

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