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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: AK2004 who wrote (136812)	6/6/2001 5:17:51 PM
From: tcmay	Read Replies (2) \| Respond to of 186894

"that would imply hundreds (plural) of billions in losses for intel and only 10 bil for amd" Message #136812 from albert kovalyov at Jun 6, 2001 4:50 PM Tim re:it staves off an Antitrust case. "remind me why intel tried to go rambus then? And why did intel jumped into slot 1, 2, 3,...,99 only to come back with proprietary socket?" Intel believe, correctly or incorrectly, that Rambus offered performance advantages over other options, esp. at that time. Note that AMD was not precluded from also dealing with Rambus. So there can be no cause of action that a violation of the Sherman or Clayton Antitrust acts happened as a result of just one of many design decisions Intel made. As for "proprietary sockets," there is no requirement under U.S. law that Vendor A supply his designs and patents to Vendor B. Polaroid was not required to give help to Kodak, nor even to license its technology. (In fact, Kodak lost a major court case and had to completely withdraw from the instant photography market.) These are just design issues, not the "predatory pricing" [SIC] issue which has often been implicated in antitrust issues, as when one railroads drastically cuts prices to force another railroad line into insolvency. re: Intel clearly has the manufacturing muscle and the cash in the bank to outlast AMD in a price war. "the assumption is that price war would lead to small to negative margins. True, amd value would go to zero while intel value would just get close to zero. OTOH that would imply hundreds (plural) of billions in losses for intel and only 10 bil for amd. Intel would be a penny stock then." Your math is fanciful. Come back with more realistic estimates of what a price war would do and perhaps I'll reply. "But if you decide to deal with reasonable scenarios then amd's structure require less profit margin than intel's. IOW $100 average asp is not the end of the world for amd but it is the end of the world for intel." I don't think any of us knows what $100 ASPs mean for either company. If the products are basically the same ones, as opposed to being different speed bins and classes (as was the case in the days of the K5 vs. Intel's offerings), then it comes down to manufacturing costs. If AMD is shipping a $100 bill with each processor they sell (in the course of the hypothetical price war), then the implications could be dire. My point was a general one, about why Intel avoids an all-out, "Crush AMD" price war. Debating who would be hurt the most and what AMD's vs. Intel's cost structures are is not an exercise we can carry out here, at least not usefully. Your speculations that a price war would mean "hundreds (plural) of billions in losses for intel and only 10 bil for amd" is not interesting to debate. "that is not true at all. Successful company still have a way to make money as long as it does not interfere with progress. " You have your understanding of the law screwed up. There is no "as long as it does not interfere with progress" issue involved. "Monopolies did make us great by exploiting the existing ideas at low cost but they failed to remain competitive." Then there is no need for laws breaking up what bureaucrats deem to be monopolies, is there? If they fail to remain competitive, the problem is solved naturally. (Not that I buy your reasoning...) "The shining example is intel's effort to pass amd if not for that effort we would still be using pentiums-100MHz." I want some of what you're smoking! re: squawking that Windows "costs too much." "and here is the example of how bad monopoly can get. It is not the price that is the issue but rather the lack of competition. " All of my PCs use the Macintosh OS. Most of my tech friends are using Linux in one flavor or another. OS/2 and Warp were there for those who wanted it (not many). BSD is readily available, as is Solaris. Sounds like plenty of choice to me. re: "dumped"...because it's pretty obviously the case that chips are often introduced at prices way below their manufacturing cost, at least early in a cycle "you need to look at the present value of the product line " I was citing this in comparison to the U.S. claims that Japan was selling RAM chips below manufacturing costs. What's sauce for the goose is sauce for the gander. re: A company like AMD, which currently exists as a parasite on Intel "Is that because amd is eating intel's lunch? As I said before intel's success was created by ibm and without amd there would not be intel today." Yes, you've made this bold claim several times. Substantiation is lacking, however. --Tim May