Paul & all: While AMD's marketing types ought to know a lot more than me about pricing structures, it sure seems to me that they have over-generalized Cyrix' bad experience with head-to-head pricing vs. Intel. Cyrix had a CPU with some compatibility problems, and tried to price it roughly on a par with Intel's equivalent (integer performance) mainstream CPU and got a drubbing.
AMD, OTOH, has a fully compatible product, closer to a PII than a Pentium MMX in integer performance, and they make the odd decision to peg its price 25% less than the lesser, older product. 25% less than the equivalent PII would have made more sense to me (i.e. K6-233 = .75*PII-200). Tying their star product's price to the market leader's semi-obsolescent 2nd tier strikes me as asking for a price war. We're just lucky (as shareholders in either company) that Intel didn't see this as an invitation to hold a "Free Pentium" month or two. Perhaps if PII had taken off a bit faster, they'd have done just that, and perhaps they're doing a bit of it even so.
Perhaps I'm wrong, and AMD is executing a calculated Japanese-style "buy market share now, make money later" plan, or perhaps you really do have to undercut this far to attack a 90% market leader, but it doesn't seem right to me.
BTW, I realize that the problem of the moment is production, not pricing, but this pricing issue has bugged me for months.
Al Seim |
