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Politics : Formerly About Advanced Micro Devices
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To: Daniel Shaffer who wrote (54185)4/4/1999 11:51:00 PM
From: Paul Engel  Read Replies (1) of 1580505
 
Daniel - Re: " the K6-III is a tremendous bargain. At 450 Mhz, it sells for $220 less than the 500 Mhz Pentium III and $20 less than the 450 Mhz Pentium II."

Try and buy a 450 MHz K63 - vendors listed on pricewatch.com have been "taking orders" for a month and a half now - and still aren't shipping.

Re: ""Regardless of its lack of strong floating-point performance, the K6-III is a tremendous bargain"

It's a bargain because it's cheaper and not very fast at FPU operations.

Re: "For example, a server with 4 AMD K6-IIIs would be $880 cheaper to build than one with 500 Mhz Pentium IIIs. "

This is a great idea. Why don't YOU BUILD THEM. You'll get rich quick, won't you?

Re: "Given Intel's high overhead costs, all of this price cutting is bound to hurt profits there as well."

Intel's OVERHEAD costs are much lower than AMD's.

First, Intel makes a lot more CPUS, chip sets, etc. than AMD (probably 5x the CPU units + 10x in Chip Sets) and can spread the overhead over the much larger unit volume.

Second, Intel's cost of capital is nil - they are awash in cash and investments.

AMD has BORROWED CASH - LONG TERM DEBT - in the bank and they are paying interest on this cash to the tune of $66.5 Million in 1998 - which was about $6 in interest per K6/K62 CPU shipped in 1998.

Paul
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