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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: SBHX who wrote (73013)	5/16/2001 12:10:56 PM
From: Skeeter Bug	Respond to of 93625

>>2. You are right that they are much bigger and can weather a full out price war than AMD even if they have more to lose per chip, but there is (still) a price premium for INTC because of consumer perception, so they may not have to cut as much<< aaah, but a $100 of those "good will" dollars intc could have pocketed will be going to rdram.

To: SBHX who wrote (73013)	5/16/2001 1:08:02 PM
From: Dave B	Respond to of 93625

Scared, My own take on this. I think INTC's strength are : 1. Its depth of engineering talent and the customer preference for Intel Inside logo. 2. You are right that they are much bigger and can weather a full out price war than AMD even if they have more to lose per chip, but there is (still) a price premium for INTC because of consumer perception, so they may not have to cut as much. I think their weaknesses are : 1. They are very big and not all their engineering talent are of the same high calibre. My initial impression is that the initial ia64 (Itanic) team is their B-team of engineers and it appears to be correct. 2. Their questionable execution recently. See slot1, i820. 3. Their questionable corporate direction to support proprietary to semi-proprietary technologies to consolidate their hold has done little to advance innovation. This includes the slot1, SSE, new AGP (3GIO), and (you won't like this) Rambus. I think AMD's main strength is that they've been hungry for a long long time. A hungry talented engineering team can do wonders in terms of innovation. AMD's main weakness is possibly stability of their chips as hungry engineering teams tends to pay less heed to testing and process flow and hence may introduce buggy chips earlier. All possibly valid points (I don't have direct info on some of them <G>). Basic Business 101 says, however, that in a protracted price war, the company that has 80%-85% market share and 6x the revenues of the company with 15%-20% market share is going to win. As the per-chip margin drops low enough, no one may make any money, but Intel has a lot more "non-essential" businesses they can sacrifice whose resources can be applied to the core business. AMD, OTOH, has few non-essential businesses to sacrifice (vis-a-vis Intel). They'll either have to let resources go in the core business, or they'll keep the resources at the expense of profitability (and this is my guess as to what they'll do). Dave