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Politics : Formerly About Advanced Micro Devices

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To: Jim McMannis who wrote (34447)	7/14/1998 11:46:00 AM
From: Maxwell	Read Replies (3) of 1574591

Jim: The Intelabees still have misconceptions of the market. If you look at the consumer demand curve it is almost Guassian. In the right side of the Gaussian curve which represents a very small probability are buyers of the PII-400. The peak currently is the 300MHz market. This is where AMD is well represented and compete well with Intel. Another factor that must be considered is that as the price of a PC drops the demand goes up. Price drops attract new buyers and old users to upgrade. AMD has positioned well to sell to the mass. Their model is based on volume at ASP $100. This model is fine if they can sell everything they have and I think they will with the right speed mix. As for box maker they make the roughly the same percentage for each box they sell. The reason their profit soar is that they are sellig a lot of boxes below $1000. Look at Intel CC today and watch for weaknesses. Their margin is dropping due to the fact that 1) Consumers are buying cheaper boxes with cheaper CPUs 2) Asian flu is affecting Intel sales 3) Celeron sales lower Intel's margin They will make up for the loss in sales from selling securities, taking depreciation, cost cutting, etc. Maxwell

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