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

To: Jim McMannis who wrote (78014)	10/31/1999 12:43:00 PM
From: Dan3	Respond to of 1572167

Re: what did they (OEMs) get for their loyalty? A few Coppermines that run on 100 buses and one or two 733s ... Meanwhile they slip a good deal on P-III-500s to E-machines Jim, You've made an excellent point. Intel's behavior continues to show a complete lack of concern for its OEM customer interests - the strategy seems to be "better to be feared than to be loved". An ugly but often successful approach - unless the time ever comes that they are granted the option of switching to a competitor. This Intel decision is an interesting one from another perspective that will be hindsight analyzed for a long time. The original AMD decision was a no-brainer, any high end purchases that were deferred were competing products, and the announced release of the Athlon cast a favorable halo over AMD's mid and low end products. It may have been worth $10 to $20 in increased K6 ASPs. For Intel this isn't the case. The majority of high end systems are still purchased from channels other than walk in retail and my guess is that these sales remain almost all Intel sales. (Neither Compaq nor IBM offer a "business" Athlon yet - I have to have machines built by a var to get the configurations I want). There may also now be more of a negative halo on existing Pentium chips (a 600 is 4 slots down from a 733 - how much would anyone be willing to pay for it?) that is depressing ASPs. So what is the effect of the non-traditional coppermine release? Most of the deferred sales due to early announcement continue to be deferred Intel sales - I would expect a few Athlon defections were delayed or recaptured, but not many. These sales continue to be possible Athlon sales, instead of being completed Pentium III sales. So this aspect is probably a negative for Intel. What is the positive that could have motivated this style of release? There was a perception that Intel was completely out of the running in terms of performance - and this perception has been removed. The growing negative performance halo has been removed along with it - and this could have a positive affect on the ASPs of currently available systems. But buying back that perception must be costing a fair number of Q4 sales - and risks making it 3 quarters in a row that Intel earnings are not quite what was expected. Fortunately for Intel, those earnings will still be enormous. But while the processor performance image has been preserved, the reliability image relative to AMD, already tarnished by the rambus troubles, has suffered further damage. And any image loss suffered by AMD for the Athlon rollout, has been wiped away. Since AMD's biggest problem has long been credibility, a substantial benefit has been provided to AMD, though its "world's fastest processor" claim is no longer unquestioned. But my own sense has always been that, in a performance tie, the winner is AMD, since they're going for a piece of the market, rather than all of it. It would have been fascinating to have attended the meetings at which the timing of the coppermine rollout was decided. Regards, Dan