Trey and all,
After going to Costco just a few hours ago helping a friend choose a low-priced computer, I'm starting to understand why AMD is able to take the lead in retail sales.
First of all, here's what I saw at Costco. There weren't too many models to choose from, but I think three or four of them were K6-2's and only one of them was a Celeron. I was about to recommend the Compaq K6-2 380 MHz model to my friend, except that the 17-inch monitor seemed to be very low quality and hard on the eyes. The Celeron model was from Acer, but my friend didn't like its 15-inch monitor, nor did she like the screen's "washed-out" appearance.
Anyway, I was amazed at how much computer you can buy these days for under $1200. The Compaq model had a K6-2 380 MHz, a 10 GB hard drive, 64 MB of SDRAM, 56K modem, 32X CD-ROM drive, sound, and the (not-so-great) 17-inch monitor for about $1200, and this is before a $75 rebate. I guess for most people, this sort of computer is plenty, considering that most consumer software out there is probably not going to overburden even a 300 MHz K6-2 for the next couple of years at least.
So what's my point? We all know that Intel has lowered prices on the Celeron in order to try and regain marketshare from AMD. However, AMD was willing to sacrifice profitability in order to keep their K6-2 cheaper than the Celeron at the same speed grade. (Heck, AMD never had much profits to begin with, so in reality, AMD has very little to lose.) That's why the OEMs continue to use AMD in their high-volume, low-priced retail computers; they see no real reason to dump the K6-2 and go to Celeron. So Intel didn't succeed in taking marketshare back from AMD; rather, Intel only succeeded in making life tough for AMD.
(Note that I'm not accusing Intel of dumping. When a competitor uses low prices to gain marketshare, no one in their right mind would NOT reduce their own prices in response.)
Right now, there are only two ways that Intel can retake marketshare from a company who is willing to go the distance in red ink:
1) Start giving away Celerons for free. Even Bill Gates would consider this act to be cruel and anti-competitive.
-OR-
2) Come up with real, technological solutions to drive down cost both for Intel and for the OEMs. Future technologies like the 0.18 micron process, the Whitney integrated chipset, and even the Timna CPU will help Intel regain the retail lead.
By the way, the reason why Intel can't take back retail marketshare from AMD is the same reason why AMD has trouble taking higher-margin business marketshare from Intel. Businesses are less cost-sensitive than AMD, and so far, they see no real reason to dump Intel and go with AMD.
Tenchusatsu |
