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

To: hdl who wrote (139160)	7/12/2001 11:42:56 PM
From: Ali Chen	Read Replies (1) \| Respond to of 186894

"why is amd selling athlon for half price of P4? Why can't it sell for at least 85% of price of P4? Some say athlon is better than P4. amd only has 20% of the market. Why can't it sell all the chips it can produce at a price closer to intel's?" Maybe because people are not paying more than it goes for? I've heard it is called "capitalistic market", or something like that :) :) :) - Ali

To: hdl who wrote (139160)	7/12/2001 11:54:19 PM
From: dale_laroy	Respond to of 186894

>why is amd selling athlon for half price of P4? Why can't it sell for at least 85% of price of P4? Some say athlon is better than P4.< For the same reason that Intel can't sell the P4 and a 1.3 GHz Athlon system sells for only $8 less than an identically configured 1.2 GHz Athlon system at Sam's Club. Very few consumers perceive any need for performance above that of a 700 MHz PIII.

To: hdl who wrote (139160)	7/13/2001 12:14:45 PM
From: niceguy767	Respond to of 186894

hdl: "why is amd selling athlon for half price of P4? Why can't it sell for at least 85% of price of P4? Some say athlon is better than P4. amd only has 20% of the market. Why can't it sell all the chips it can produce at a price closer to intel's?" Two reasons: 1. P4 is selling about 50% of planned P4's in q2 according to some which might indicate that P4's are overpriced or that P4 margins have been squeezed to the point where there is nothing left to give (large die size, large production cost). 2. As kapkan4u has indicated, 30% market share seems to be the requisite share in the industry for one to achieve a degree of price autonomy. INTC has owned the channels of distribution historically by delivering superior product and perhaps (I don't know about this, but inferences do abound) by offering "bundled goods" deals that erect fairly significant barriers for AMD to scale. Only in the past 2 years has AMD been able to offer superior price/performing product across the MHz spectrum and it takes time to dismantle allegiances, some perhaps captive, that have existed for over a decade. The current progress by AMD in achieving increasing market share is quite astounding given the slope of the mountain that they are climbing. The latest Athlon 4 mobile product in AMD's stable, if a home run as has been cited, should assist AMD greatly in achieving significant market share increments over the next 6 to 12 months and may get them to their 30% goal and a degree of price autonomy within a 1 year time frame. (A 30% market share by AMD combined with additional evidence that the P4 is a dud over the next 12 month period could do wonders for the existing pricing structure from AMD's perspective...Gonna be interesting to see how it all unfolds.)