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

To: kash johal who wrote (122617)	8/21/2000 4:45:32 PM
From: Road Walker	Read Replies (2) \| Respond to of 1576923

Kash, re: "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." Usually your posts are more thoughtful and less insulting. I'm disappointed. A processor is not a PC. It's one component. Other costs include other components, assembly, marketing, packaging, shipping. By the time you get to the finished product, your $250 +/- discount in the microprocessor cost becomes maybe a 10% to 15% lower retail price. At the same time, it looks like we are in a DRAM shortage, with the subsequent increase in prices, so your discount may be even less. Hardly a compelling reason to rush out and buy a PC. As I said, consumer demand is slightly elastic based on price. But consumer demand is also elastic based on competition from other products. Will Sony Playstation 2 have an adverse effect on the sales of home PC's? Will digital cameras, which are just hitting stride this year? How about new products like handheld computers or MP3 players? Will a slowing retail segment have an effect on PC sales? Or do you believe there are unlimited consumer dollars, and that PC's are not effected by other consumer products? It's just my humble opinion, as an AMD stockholder. Obviously you disagree. You may be right, and if you are, I suppose you will be an ------- about that as well. John PS As to gross margins, they are great at figuring selling price minus cost of good sold. But you've also got those pesky SG&A cost that that grow in percentage as revenues decrease, and can lead to much lower net margins and much lower eps.