Re: "I bumped into my AMD friend ... "
Somebody (I believe it was Gates) once said
that if you (Borland) do not have as many
chips as the other guy (MS) when playing
poker, you should not raise the ante (drop
price to gain share).
Seems like we have the same situation here
with AMD and Cyrix. Their development,
production, administrative, and marketing cost
has to be spread over fewer units. Yet they
try to buy market share with lower price.
If they were to start posing a threat to
Intel, all Intel has to do is to drop their
price. Yes, Intel's profits will decrease, but
they will not go bankrupt. On the other hand,
AMD, and Cyrix, with their already thin
margins, will have no room to go lower. Their
only option is fold their hand, or sell.
That's just simple economics. If they sell,
then a company that is big enough to buy AMD
will be too big to have the culture to turn
out products at the frantic pace AMD does
today. You can bet on it.
The engineers at AMD and Cyrix have to be
very, very smart, and work back breaking
hours, to be able to match Intel's microcode
and performance (??) within months after Intel
announces a new processor. It is a real pity
that they work for companies where the
business model is doomed to failure. |
