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

To: Elmer who wrote (61006)	10/29/2001 6:15:20 PM
From: Bill Jackson	Respond to of 275872

Elmer. AMD wanted share fast. The only way to get it is to compete on price. Had Intel not dropped the price AMD would have more share. At some point an balance would be struck. AMD price driven share versus Intel marketing driven share. This equilibrium would have established itself at a far higher price. Intel made an error and they thought they could kill AMD by price competition and marketing. away went $25 billion of Intel profits. Had Intel not done this a new eqquilibirum with AMD and Intel more or less equal ib the market. Right now Intel is about 4.5 times as big as AMD in the market. Intel bought the difference between those two positions for $25 billion. Was it a good deal? Not as good as the one that got away, AMD dead. Bill

To: Elmer who wrote (61006)	10/29/2001 9:21:59 PM
From: muzosi	Respond to of 275872

i think the question is what the discount rate a non-primary supplier of a good can charge is without causing a price war. as in all markets, in desktop x86 there is a primary, well known supplier whose product gets purchased at a premium with a questionable justification and there is secondary supplier. the secondary supplier has to sell at a discount just to be able to sell. i personally don't consider "that" discount causing a price war. the question is what is the rate beyond that reasonable and stable discount which causes a price war. if we can agree on that number, we can figure out if amd started the war by going below it or if intel did by not tolerating the secondary supplier.