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

To: AK2004 who wrote (51807)	8/20/2001 8:03:42 PM
From: wanna_bmw	Read Replies (1) \| Respond to of 275872

Albert, Re: "ok, 6% increase in market share would roughly translate into extra gm plus adjustment for fixed cost. Using the earlier example that would be 75% of asp. Lets calculate the justifiable decrease in asps .5.7P=(.5.7+.06.75)P(1-x) => 11%" For a conservative company, an 11% (assuming your figure) reduction in ASPs to regain ~6% market share can be justified for the long term. However, I believe Intel is being more aggressive, and intends to bet more than that to win against another highly aggressive company (AMD). My guess is that they justify short term pain by believing in long term gain. If they can earn back 80% market share, and improve margins as demand returns in 2002 and 2003, then the short term sacrifices would be worth it. If it were justifiable, it wouldn't be a risk. wanna_bmw