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

To: Bill Jackson who wrote (86556)	1/11/2000 1:40:00 PM
From: Road Walker	Read Replies (1) \| Respond to of 1572680

Bill, Intel has always been relentless in their price cuts, a little less so and a little slower in the higher speeds. I expect they will continue this strategy. If I were to try to get inside their heads on pricing strategy, I would guess that there are two primary considerations: 1. Determining prices based on the mix that is sold, to maintain a relatively steady GM percentage. 2. Price to keep the competition, with presumably lower GM's, unbalanced and nearly unprofitable. On the first point, Intel's manufacturing costs are going down with the transition to .18, I would guess that that will allow them to be more aggressive. On the second point, IF they can't retake the speed lead, I would guess that they will take the GM hit until they can. Look at the balance sheets, Intel can make money at the same price point that AMD loses money, therein lies the power. The low cost producer controls the marketplace. On another point that I haven't noticed discussed on the AMD thread (I don't read it every day so I might have missed it), don't you folks think it is an advantage to AMD that Intel is entering the market for "Internet Appliances"? This is in direct competition to their customers, the boxmakers. If I were an AMD salesman, I would say to the customers, "Do you want to buy from a component supplier that makes branded products that compete with yours? Every sale they make was a potential sale for you. They use the profits, when you buy from them, to support products that compete with your products in the marketplace." To be honest, I think that is part of the reason Gateway is not so happy with Intel. John