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

To: Road Walker who wrote (122608)	8/21/2000 2:31:01 PM
From: Joe NYC	Read Replies (1) \| Respond to of 1576893

John, Most folks on the AMD thread seem to think that no matter how many microprocessors AMD makes, they can sell them, if they just lower the price. That's not true. Retail demand is finite, there will only so many thousands of PC's sold to consumers in the 3rd and 4th quarters. This is partially true, AMD is at less than 20% of world supply, so even if their output doubles, there is a plenty of market market share left to gain. But AMD is not talking about doubling the output. If the statements about Q3 and Q4 are true and AMD sells 7 million and 9 million chips, the market share numbers will not change very much. 7 million is almost no change over Q1/Q2 and 9 million basically is a response to an increased seasonal demand. Another way to look at it, if AMD double their output, Intel would probably still be able to sell more processors, because the market is growing faster than 20%. AMD would just capture more of the growth. On the other hand, if Intel doubled their output, no amount of price cutting would help absorbing the additional chips. Joe

To: Road Walker who wrote (122608)	8/21/2000 3:28:00 PM
From: kash johal	Read Replies (1) \| Respond to of 1576893

John, re:"Most folks on the AMD thread seem to think that no matter how many microprocessors AMD makes, they can sell them, if they just lower the price. That's not true. Retail demand is finite, there will only so many thousands of PC's sold to consumers in the 3rd and 4th quarters. Consumer demand is slightly elastic based on price, but prices are going up or staying the same. Retailers are reporting soft sales. There are a lot of competitive products to PC's this year. I think retail PC sales will be flat or down vs. 1999" You seem somewhat ignorant of classic marketing theory. Clearly lowering prices does spur demand. There is market elasticity based upon price. This is generally accepted economics 101. AMD does very well selling all it can make with an average ASP of $100. With average ASP last quarter of $93 margins were in 50% range. As ram goes on chip - costs come down margins go up. If AMD needs to price 1Ghz chips at $250 to move them more power to em. regards, Kash

To: Road Walker who wrote (122608)	8/21/2000 7:48:41 PM
From: hmaly	Read Replies (2) \| Respond to of 1576893

John Re..<<<<Most folks on the AMD thread seem to think that no matter how many microprocessors AMD makes, they can sell them, if they just lower the price. That's not true. Retail demand is finite, there will only so many thousands of PC's sold to consumers in the 3rd and 4th quarters. <<<< John, wouldn't that be like telling me Porsch can sell only so many Boxers no matter how low the price is? I don't know about you, but I am buying one as soon as the price goes below $10,000. I wouldn't even do my customary haggling. I think I will put in my order tomorrow just in case, because I don't think I will be the only one.