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

To: that_crazy_doug who wrote (108335)	4/29/2000 12:56:00 PM
From: tejek	Read Replies (1) \| Respond to of 1575984

doug << I don't think its a fallacy...AMD couldn't compete because of prices....>> I disagree, if the K6-2 was as good a product as the celeron, then there wouldn't have been a problem. Look at how they did before the celeron got on die cache. It did not matter if the k6-2 had been as good as the celeron.....Intel was able to undercut k6 prices. It was able to generate revenues (and profits)from its PIII line that offset any losses from celeron....in the meantime, AMD had the one product line, the k6, and was losing money like mad. If it weren't for Athlon, I suspect AMD would be broke right now. << Intel kept celeron prices down and kept cumine prices up so that celeron's poor margins were covered. >> They can't do that anymore. That's right but they still have better margins. << AMD did not have high end chips at that time and was starving trying to compete at the celeron prices set by Intel. With Athlon, the playing field is more level but Intel still has the upper hand. >> Intel has 40x the market cap and 4x the market share. They need much higher ASPs than AMD does to justify stock price. We're clearly at an impass if you think Intel can sell at the same ASP as AMD and not have it's stock hurt more than AMD's is. Yes, we are at an impasse because I don't think you understand the premium that Intel commands in the market place. If it were any other company, its stock would be priced at half what it is right now. Its both a DOW and NAZ component, a leader in the tech world. Like ORCL and other leaders, its P/E is way out of line with its growth prospects.....that's the premium factor. And that factor will not change no matter the ASP! What will change it is if Intel loses its stature in the marketplace. ted