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

To: hmaly who wrote (60752)	10/29/2001 12:19:33 AM
From: Tenchusatsu	Read Replies (1) \| Respond to of 275872

Hmaly, <It is a matter of image.> Yeah, I guess. <Wanna in his post,said that AMD, by participating in a price war, caused Intel to lose ten billion. I just pointed out that Intel started the price war, and therefore bought its reduction in profits upon itself. > I'll use a real-life war analogy here. Each side is always going to accuse the other of starting the conflict. I can easily point out how AMD started it with their "25% discount" policy several years back. But then I'm sure someone else can point out something Intel did before that. Tenchusatsu

To: hmaly who wrote (60752)	10/29/2001 1:00:00 AM
From: wanna_bmw	Respond to of 275872

hmaly, Re: "Wanna in his post,said that AMD, by participating in a price war, caused Intel to lose ten billion. I just pointed out that Intel started the price war, and therefore bought its reduction in profits upon itself. Amd had very little choice, but to respond as Intel started the war price with AMD; just as Intel is starting another war on Monday." I'll second what Ten said, but I also wanted to mention that one could also argue the price war in another way. Some people claim (correctly or incorrectly - it's irrelevant) that Intel's biggest competition is Intel, not AMD. What this means is that getting people to upgrade their Intel machines (which represents the currently largest installed base of PCs) represents the greatest market for Intel, even larger than recovering share from AMD. In the case of a slow economy, it can be argued that Intel lowered prices to entice more buyers to upgrade their current machines, rather than putting pressure on their competitor. Realistically, it may be a little of both. However, you can't fully place the blame on one company or the other. The fact is that once Intel lowers prices, AMD is obligated to do the same, no matter what the reason actually is. AMD could have easily stated the pricewar, too, by lowering their prices in an attempt to gain market share, which is a reasonable assumption. But still, what does it matter in the end. I was merely illustrating that lower margins on CPUs has been a leading factor in Intel's drop in profitability, and it's reasonable to assume that AMD had at least some part in that. What that means to Intel is that creating more competitive products is now a requirement for maintaining the business that they are used to. What it means to AMD that despite their best efforts, they have had to pay a high price to maintain market share, and their main competitor is still profitable. Compelling products from them is even more important, since they have the handicap of being the smaller company with fewer resources, and fewer relations with other companies. It's just one more reason in my list why I think AMD is less of a good buy in terms of owning stock. You will obviously disagree, but you should have a better reason why, than simply one based on the price war, and who started it. wanna_bmw