3) combination of 1 & 2 means AMD cannot raise much money from stock sale. Means they can't expand capacity or compete in high end. It also means the 30% dream may come about, but it will all be in the low end segment only. Meaning, Intel will be able to set reasonable margins for the mid and high end, where all the profit is.
Reasonable margins by whose definition, though? I don't think enough to drive the stock or I would own it. I don't think there is enough of a product differentiation to matter for 99% of the people. Even for our most business critical applications we buy the middle grade. The bleeding edge, high margin processor just isn't necessary for very many, if any, people anymore. The really heavy duty applications (media, CFD, etc.) lend themselves parallelism, and the other stuff just isn't really heavy. The hardware is ahead of the software. I'm a power user in my organization (for a non-workstation machine) and I have the slowest Core2 we could buy at the time. Works great, don't need more, and best thing is that fan doesn't scream like it did in the old Netburst box that I had before this. Our engineers are on AM2 platform boxes and we've never bought FX processors -- we always buy dual core a couple speed grades below the top, so we're talking about a $200 processor. It's a commodity market these days for most people, and Intel can't make it go back to the good old days. |
