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

To: Charles R who wrote (75291)	10/13/1999 12:47:00 AM
From: kash johal	Read Replies (2) \| Respond to of 1578184

Charles, Re:"OK, how do you explain the PIII ASPs? (retail prices are available from Pricewatch as you know) IMHO, Intel had to make a choice - cede marketshare or drop ASPs. Data so far indicates that they have opted for the latter. If AMD can stay a speed grade or two ahead, at some point, Intel's current strategy will stop working and come back to haunt them. If Intel can keep up or take the lead back on the speed grade issue, the current strategy would be the correct strategy." Couple of thoughts. I suspect Intel knew yields on Athlon were good and so slashed prices for the big OEMS not retails. Also I suspect the market will spank them pretty hard for missing numbers and I see no way that they can afford to slash and burn high end prices in Q4 (they can in Q1 when cumine is majority volumes). I see Q4 as a real challege - the high end is a relatively small space although contributing disproportionate profits. If they are not ahead in clock speeds by one or two grades then they must price reasonably. Also AMD will have some 0.18 micron AThlons too and so we could see 750/800Mhz Athlons from AMD in november timeframe - remember they are now in production and have started sampling customers. This quarter for Intel could be brutal depending on AMD speed bins. Seems to me Intel is stuck with large volumes of 600Mhz and below product - this is where i expect prices to be trashed and quickly. They have a real tight-rope with ASPs/bin splits//volumes etc to manage to meet or beat expectations. regards, Kash

To: Charles R who wrote (75291)	10/13/1999 1:00:00 AM
From: Dan3	Read Replies (1) \| Respond to of 1578184

Re: OK, how do you explain the PIII ASPs? Continuing effects of narrowing the price performance delta between Pentium and Celeron - fewer and fewer people were dumb enough to go for the Pentium II over the Celeron. Pentim III brought back a little benefit, EB series will bring back a little more, but it's no longer just PXXX vs Celeron. For the next 3 quarters, at least, it looks like the high end is no longer a given for Intel. The high end of the market is very high margin. I see Intel flat out losing $300 million in direct sales to Athlon next quarter, and losing a further $50-100 on each of 4 million additional processors due to ASP erosion at their high end. Now that will be an Athlon effect! I expect Q4 EPS will be below Q3's 45 cents - Intel's new business model of becoming a conglomerate instead of a semiconductor company will most likely lead to "one time" charges each quarter from now on. Dan