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

To: AK2004 who wrote (51851)	8/21/2001 11:44:34 AM
From: Road Walker	Read Replies (2) \| Respond to of 275872

Albert, re: care to correct me or the statement that I am wrong is enough It's enough. I've done 100's of P&L statements in my time, with various scenarios. To do it correctly, you need all the numbers, from manufactured costs for each particular processor, unit sales and ASP's for each, marketing cost, shipping cost, payment terms and cost of money, on and on. It won't work with the information you have, certainly I wouldn't even give it a try with the information I have. But I guarantee from your conclusion that you are wrong. What you have to understand is that as ASP's go up, fixed cost as a percentage of unit revenue goes down. Variable costs stay the same, GM goes up. Spreading fixed costs over more units at a negative gross margin doesn't help anything. The more you sell, the more you lose. You may lose less per unit, but the cumulative total is more. You can argue until you turn blue that AMD selling more units at a loss is better than selling less units at a profit, but it will never be true. Do you think that if AMD abandoned their 25% discount policy, and priced their product at 5% to 10% below the Intel equivalent clock speed, that Intel would be less aggressive with their prices? John