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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: jeff_boyd___ who wrote (21946)	12/8/2000 2:45:29 AM
From: Joe NYC	Respond to of 275872

Jeff, If Intel has a lock on the corporate segment and their PIII product offering is so bad that they can't compete in retail, why wouldn't they offer PIV at little or no margin just to deprive AMD of the profits? Aside from retail what other segments does AMD compete in right now? Unlike at other times in its history, Intel is struggling now. (It sounds funny, since Intel is probably the most profitable company) Anyway, Intel doesn't have a luxury to do things that hurt their bottom line significantly, just to hurt the competitor. If you follow Goutama's ongoing project of finding the true state of Intel's financial statements, you well see a lot of smoke and mirrors. If you are strong and confident, you don;t have to resort to smoke and mirrors. Other than retail, the other significant part of the business is the white box vendors all the way down to the DYO. These segments are very value conscious and knowledgeable. AMD has an attractive value proposition for them, and as a result, AMD is very strong in this segment. In other countries, especially less affluent ones, this segment is even bigger. For example, in Slovakia, which I visit often (I was born there and have many relatives there), a vast majority of computers are sold through the white box / screwdriver shops. And even though only the enthusiasts buy Athlons there at this time, I have seen a lot of K6 based machines there in the past. Once the infrastructure problems are solved, Duron will become a true star in those markets. The problem that AMD is still facing is the excessive cost of motherboards - the traditinal ones, and a complete lack of integrated motherboards. The nice Athlon motherboards are $100 to $160. Compared to that, Socket 7 motherboars are in $50 to $90 range and Pentium / Celeron motherboards are cheaper than Athlon Socket A, even though many Pentium motherboards have integrated video. These problems are still limiting AMD growth, but slowly and surely, these problems are being solved. Joe

To: jeff_boyd___ who wrote (21946)	12/8/2000 8:56:14 AM
From: Dan3	Read Replies (1) \| Respond to of 275872

Re: why wouldn't they offer PIV at little or no margin just to deprive AMD of the profits? They are already close to doing so, but consider this: Intel's raw cost on P4 is around $100 due to die size. Add in the $70 check for Rambus that is included with each CPU, and you are at a cost to Intel of $170 for each P4. AMD's cost for a thunderbird is about $30. So if Intel sells its limited production flagship at cost, pushing down the price it will be able to get for anything else it sells, AMD can sell its Tbird at a 40% discount to Intel's cost and still be $12 above its present ASP, as well as making a margin of 70% (e.g. cost $30 and sell for $102). Regards, Dan