What does this mean going forward? I continue to believe that AMD is likely to pick up share as a result of the product roadmap.
Tad, it will be tough for AMD to pick up share until next year sometime, if ever. It will be next year until the .18 process comes on line. Until then, if the product mix shifts more heavily to K6-3 and K-7, which it has to, lest AMD go out of business, AMD will only be capable of producing far fewer total die, given the substantially larger die size of both these CPUs. With this product shift, AMD can't hope to gain share. The question is, can they really sell $200 to $400 CPUs on there own merit, without this unwinnable price war strategy? If they are successful, the company will become profitable again while losing share.
I believe this is the strategy they will take. They will cede the low end to INTC, who will gently raise the the low bar to $100-$120 minimum. They can still make good margins here, unlike AMD. the new battle ground will be the mid range. I think INTC and AMD will be at price parity here, and AMD will abandon its 25% pricing strategy. INTC won't fight so hard here, unless AMD takes better than 10% share in this segment which will be nearly impossible given their relatively limited total capacity. But they should actually be able to be profitable. As for consistent growth, once they reach profitability, I can't envision any scenario that makes a case.
Gary |
