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

To: milan0 who wrote (73864)	10/4/1999 9:09:00 PM
From: Bill Jackson	Read Replies (2) \| Respond to of 1572531

Mike, Remember since Intel still dominates this market if they cut their high end product that will impact their bottom line directly and severely. It will amount to a broad reduction in ASP across the entire desktop line and the xeon margins will not be enough to overcome such a drop. Price cuts work best between equals as they both suffer the same BL losses. As an example if AMD made a single CPU at one speed(high) would intel lose the margins on all their CPUs to fight it? Now we have a renascent AMD, will Intel do that to try to kill it? I think not as we now know that Compaq and IBM and now perhaps Dell too want AMD to live and prosper so a price cut will not kill AMD because they will get enough sustenance business to keep them going because CPQ and IBM(Dell?, Gateway? HP? too?) now see the light and the risk of being dependent on a single supplier and they also love those price drops that dumbo(Intel) has been giving them gratis. So the question is does Intel continue a failed pricing philosophy at a new enlarged cost or do they allow AMD to make some hay until they get Rambus back onstream? It is not so easy to decide. Deny AMD some profits and at the same time give away ten times as much. Yes Paul we know Intel makes money and AMD does not(yet) but how much more money would Intel have made had they not tried to kill AMD(and failed) I estimate they have left $200 on the table for every CPU they have made for the last two years. For 200 million CPUs that is $40 Billion(or more) wasted trying to kill AMD. Talk about a failed strategy, and now AMD has leapt to the fore. Poetic ain't it. Who was that warrior who wiped out Goliath(Intel) with a single stone(Athlon). Bill