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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: kash johal who wrote (63401)	6/25/1999 6:34:00 PM
From: Charles R	Respond to of 1572145

Kash, <Well remember that Intel provides rebates on things like advertising etc which lower the effective ASP. I wish AMD would do the same and then provide generously on the kick backs.> These incentives that you talk about are what have provided a strangle hold on the OEMs and provided good returns to stockholders (thanks, Intel). But, I doubt the industry will get drawn into the same supplier stranglehold again. It is in the interest of OEMs to commoditize suppliers. Every OEM given a chance would rather take the marketing dollars, get rid of the Intel Inside logo and promote their own brand. As I have noted elsewhere, this pricing is very good for AMD and the OEMs. The OEMs can price the systems above PIII levels and use the cost advantage to drive the sales. It gives them enough margin to do some "push" in the channel (spiff, displays, and other channel activities)and do some "pull" with their own ads and website promotions. If AMD sold everything they produced last Q then they wouldn't have worried about K7 pricing and priced it rather high (which I believe is what they were planning to do). But, given the last quarter, the prudent path is to incentivize the channel and make sure that they can sell whatever they can produce. Once they feel comfortable that they can sell whatever they make, I am sure prices are going to creep-back up with every new speed grade that gets introduced. Intel's management clearly has the option of making the price Vs. speed grade curve more linear to accomodate for the loss of high margin PIII-500/550 business. This would be good for both AMD and INTC going forward. Let's see. Chuck