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

To: Tenchusatsu who wrote (63512)	6/26/1999 9:39:00 PM
From: fyo	Read Replies (2) \| Respond to of 1571403

Tench - Re: I'm arguing, however, that AMD is indeed charging less for the Athlon than they can realistically get for it. Either that, or like Ali Chen said, the Tier 1 customers are forcing AMD to sell the Athlon at lower prices, perhaps in an attempt to get Intel to discount the Pentium III. I just came across this bit on Ace's Hardware (www.aceshardware.com): "OK, some prices for K7 MB are here, the MSI 6167, at 29800 yen" which comes out as approx. $250. That's a lot of dough for a PC motherboard and may (in part) explain the pricing of the K7s. The link at Ace's in incorrect... the correct link is: plaza18.mbn.or.jp --fyodor

To: Tenchusatsu who wrote (63512)	6/26/1999 11:07:00 PM
From: Bill Jackson	Read Replies (1) \| Respond to of 1571403

Tenchusatsu, One reason Intel may in fact cut prices is to deny AMD the potential profit yield that a K7 success would bring. It looks like they are going to play the VIA lawsuit game when the purpose for the licence does not suit intel. Whether or not they get the injunctive relief the DOJ will be looking keenly at this attempt to forestall AMD making use of VIA products. I suspect VIA products will be made and the lawsuit will be fought later, much later, too bad for Intel. With Rambus looking deader with every passing day I suspect that the default program(the denied one) will come to the fore to make use of available memory until rambus gets it's act in gear, if ever. Bill

To: Tenchusatsu who wrote (63512)	6/28/1999 1:28:00 PM
From: A. A. LaFountain III	Read Replies (3) \| Respond to of 1571403

Tench: re "the Tier 1 guys like IBM and Compaq who would benefit greatly from Intel and AMD slugging it out " This is a very interesting subject. Much of the discussion on this thread centers on AMD's ability to design and ship competitive MPUs and the nature of INTC's response. This is appropriate. But the underlying assumption is that other things are equal, including a belief in the price-elasticity of the PC market. In fact, what we are seeing is that the unit growth in PCs is just barely enough to pull PC revenue growth north of 0%. Major vendors such as IBM and CPQ find themselves losing millions (even 1,000 millions) of dollars. It may well be that the Tier One vendors are forcing AMD to sell the Athlon at lower prices, even if it's to get INTC to lower its prices. In the meantime, their own gross profit is apparently failing to cover their operating expenses. This calls the industry model into question, and would seem to confirm rapid maturation (and I don't believe that Dell's success at playing shifts within the market should be confused with the overall nature of the market). If so, forcing the vendors of the most expensive component in the box to lower their prices so that the box prices themselves can be lowered may be a terribly wrong strategy for these Tier One vendors. Now it might be that the market dynamics are merely reflecting the sudden change last year from essentially a monopoly into a duopoly of sorts (at least at the low end). Or it may be that the other thing that is not equal is the extent to which software has fallen behind the curve, which is allowing the low-end PC to become a very viable substitute for the price points that have normally constituted the sweet spot of the market. Even so, the box vendors are finding that their price and profit per box is falling behind the SG&A expense per box necessary to support the business. This is an inherently untenable situation. It might lead the OEMs to decide that pricing is no longer an appropriate form of competition. Of course, for that approach to succeed, the customers must buy into it as well. That's probably unlikely. So what we're probably going to be stuck with is a situation where everybody is doing what they believe is correct and all it does is screw everything up. Call it Adam Smith's Invisible Finger. - Tad LaFountain