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

To: Road Walker who wrote (51796)	8/20/2001 7:37:53 PM
From: AK2004	Read Replies (1) \| Respond to of 275872

John re: There have to be a few that understand basic business principles better than AMD. hmmmm, maybe you should send an e-mail to amd and explain how gm helps fixed costs since the higher gm implies lower cost <ggg> I guess you meant to say asp ok, why don't we calculate how high amd's asp should to be competitive with intel at 10% market share (intel's 80%). Let's take a simple approach that each company needs 50% gm and intel's fixed cost is 50% of total cost. Lets call Intel's asp as P. Amd's cost would be then (.25+.25.8/.1)P=2.25P, add gm and we get 4.5P. Hence all amd needs to do is to drop to 10% from 20% and charge 4.5 times intel's asp. That is if intel's asp is $200 then amd's should be $900 and all will be well. <gggg> re: There are over 4000 stocks traded on the Nasdaq I'll take your word for it <ggggg> Regards -Albert