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

To: kash johal who wrote (48691)	7/22/2001 10:31:48 PM
From: Dan3	Read Replies (2) \| Respond to of 275872

Re: Intel has margins from servers, business, mobiles etc to provide cover - AMD doesn't. AMD produces the best performing dual processor workstation/server - period. It will gain them sales and delete Intel's opportunity to subsidize desktop sales with server sales. The Nvidia chipset may have finally won "business" SKUs for AMD from IBM and/or HP. If you don't think AMD is in the mobile PC market, you need to go to a Best Buy or Circuit City or CompUSA or check online. Regards, Dan

To: kash johal who wrote (48691)	7/23/2001 1:24:44 AM
From: tejek	Read Replies (1) \| Respond to of 275872

Kash, Option 1 essentially means an exit out of CPU's. Maybe that's the only end as you propose it...a reduction to 10-15%..... but I don't understand why the reduction has to be so big. I was thinking more in terms of a couple of percentage pts.....somewhere between 17% and 22%. Option 2 is ONLY way to go if they are serious about the CPU biz. Its very HIGH risk and high REWARD. I don't think high risk/high reward requires you to bleed quarter after quarter. AMD lost money for most of the 90's trying to go head to head and beat Intel at its game. Only when AMD's product line is clearly better does that kind of approach meet with success. Getting to 30% market ensures: Good MB and infrastructure support. Reasonable market share in several segments: desktop and notebook etc. If they only play one segment Intel can leverage other segments to drive AMD out of biz. You are in the business so I can't argue with you on this issue....but again at 17% last year, AMD was making money. Grabbing marekt share has been AMDs strategy for a while (and rightly so). I agree.....but that doesn't mean they have to get to 30% market share in a year while bleeding all the way there. Unfortunately they bet on a growing market and a $100 CPU price as viable. Now they may have to recalibrate a business model with $50 CPU's(unless they can get MHZ crown - which doesnt seem likely until hammer). Do you think its likely they can get their margins down fast enough to fit a $50 CPU? To do so, it seems to me, requires one hell of a business model and unfortunately AMD's recent bout with profitability was not long lived and so, did not provide a lot of security. They can get there in several ways to increase value and prices: 1. Bundling deals with MB/CPU/DRAM - will Piss Off lots of partners but a guys gotta make a living. 2. Integrating chipsets with CPU to increase value (buying NVIDIA or ATI may be required). 3. Selling direct to white box shops and cutting out middle men. How long would it take to do one or all of the above? FYI, I just picked up a HP celeron box PLUS 15" monitor in a box for $599 from fry's. Margins at low end are gonna SUCK for a while - Intel has margins from servers, business, mobiles etc to provide cover - AMD doesn't. I don't disagree....and that's why I think AMD needs to chill for a while until its clear what's happening to the chip market. The latest I've heard is that the back to school orders were way off in general and the XMAS orders have not started coming in yet even thought its mid July. I don't think this country nor the world will slip into recession but I suspect business will be slow for the next year. Furthermore, the only PC company gaining ground is Dell...the one major company that does not use AMD chips. Bottom line: I think its too early in this game for AMD to be bleeding, and that it needs to cut back expenses and put its market share goal on the back burner temporarily. ted Enter symbols or keywords for search: QuotesStock TalkChartsNewsPeople Symbol Lookup Subject Titles Only Full Text Go to Top Terms of Use