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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 203.14-0.8%Jan 9 9:30 AM EST
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To: Tenchusatsu who wrote (213068)10/9/2006 6:29:04 PM
From: PetzRead Replies (2) of 275872
 
But retroactive first-dollar rebates are NOT volume discounts.
A true volume discount charges list price for the first 100K microprocessors,
5% discount for units 100K - 1M,
10% discount for units 1M - 3M,
15% discount above 3M, etc.
...or something similar.

But Intel's rebates work like this,

OEM "LittleButLoyal" sells about 1M PCs a quarter and last quarter it was 90% Intel. It gets a 10% discount if they buy at least 900K Intel CPUs this quarter.

OEM "BigAMDSupporter" sells about 15M PCs a quarter, about 50% AMD, but it has to buy 7.5M Intel CPUs to qualify for a 15% discount. Otherwise they get nothing.

Clearly, Intel's Mulloy thinks this is legal, since it is exactly the kind of behaviour AMD described in its complaint, and "All the business practices AMD argues about are lawful."

Do you?

Petz
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