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Politics : Formerly About Advanced Micro Devices
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To: Tenchusatsu who wrote (49185)2/10/1999 9:46:00 PM
From: greg nus  Read Replies (2) of 1572211
 
Ten the only example of anyone one having the ablility to get a consumer to pay a premium overlist is in the case of server shortage. My old economics perfessor described it this way what is the price a willing consumer would pay for a glass of water in the middle of lake Michiagan compared to a glass of water in the middle of the sahara desert. Same product different market conditions. Now apply that to chips, and you find there is on premium. First the intel or amd chip must be capable of performing standard function according to the X86 format. Secondly unlike the desert there is no shortage relative to the demand. So Intel keeps the market in somewhat of a price equalibrium. Intel has demonstrated the ability to charge a premium for there chips but only in early stages of product release and only when the technology is unsubtitable, like when the first pentium processor worked around the bottleneck, and demonsrtated superoir ability to get the job done. The reason why that can't do it today is because 1. they have nothing new to offer other than minor step improvements. 2. Intel has flooded the market with sufficent demand given the supply and 3. AMd stands in the shadow as a and thsi is the real rub viable alternative. thsi the the part that makes the intel exeuctives bounce off the wall and turns pauls face redder than an italian ferrira. soultions... Grow the market..ie expand it.. Innovate it with product improvements shut some fabs.. hard to do with AMd expanding to second mega fab. or and this one is the falacy price your competitor out of business. The OEM's won't let this happen, nor will the FTC. So the best Barrett can do is make life meserable for his competitor for a short while during slow peroids between product innovation. The work cut out for AMd is to differientiate as much as possible like with 3D now. cut cost of production to be the low cost producer. And out innovate your competitor. Sanders strenght aside from all his weaknesses is that he is he is a better marketing exec than Barrett who has little or no street smarts in that arena. He has a better pulse on how and weere to ultimatly expand the market for microprocesssors with video appplication. While barrett lives in the desert in Phoenix Sanders has moved to hollywood. Sanders know's the computer and the TV are converging and he is positioning AMd to be in the thick of the multimedia revolution that is about to take place. Sanders is spending his time paying attention to video technology. Barett is focused on how to build more chips, an admirable ambition but one that ultimatly leads to lower incremental prices.
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