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

To: survivin who wrote (66416)	12/27/2001 6:04:30 PM
From: Elmer	Respond to of 275872

Bad choice of words. FYI, predatory pricing is typically used in the area of antitrust litigation to describe pricing below marginal cost (incl. kickbacks, discounts advertising incentives, etc.) designed to eliminate competitors in the short run and reduce competition over the long haul. OK, I'll accept your definition. What about dumping? AMD is clearly selling below cost and has done so many times over the years. The definition hardly fits AMD, but does apply when intel cuts prices with the intention of sacrificing present revenues for the clear purpose of driving the competition from the market hoping to recover the losses with higher prices at a later time. I believe any company, even a monopoly, has a right to compete and if the competition dumps their product at below cost, as does AMD, Intel would certainly have the right to price their products competitively. In reality Intel prices their products higher than AMDs. One does not wage a price war from above and no company can be held responsible for the incompetence of their competition. If Intel can make their products cheaper than AMD and sell them at a higher price than AMD, they can hardly be guilty of predation by pricing too high. In fact Intel could price their products so low as to drive AMD much deeper into debt and they could do so at a price above marginal cost. In AMD's case, matching intel's prices is a matter of survival and hardly undertaken with predatory intent. Can the same be said of intel's drastic slashing? AMD does not match Intel's prices. They undercut Intel's prices. Intel can hardly be accused of predatory intent by pricing above AMD in an effort to maintain market share. EP