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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Tenchusatsu who wrote (147760)	6/19/2002 5:03:37 PM
From: TimF	Read Replies (2) \| Respond to of 1580482

If you haven't noticed, AMD is already dropping Duron. Watch as Intel raises the bottom on low-end CPU prices to compensate for the inevitable drop in server margins. When Hammer ramps up Tbred becomes the new low end AMD chip. In any case exiting low end desktops is not like exiting desktops. The desktop market is the biggest part of the market. Start with marketing and cementing relationships with customers. Good idea. Provide products and services that the incumbent won't want to provide. Which for AMD would mean at least being reduced to just the low end, and at most getting out of the flash and the CPU markets (which basically is AMD's whole business). The first would make things more difficult for AMD. The 2nd would basically be a decision by AMD to go out of business. Never start a price war with the incumbent; instead, defend yourself against any price war that the incumbent will wage against you. (Matching price drops is not a viable defense.) So how do you respond when the other side of the war drops their prices? AMD might want to consider thinking outside the box if they want to survive this. Maybe but I think if AMD tried to follow your plan they would be out of business in a couple of years. Tim

To: Tenchusatsu who wrote (147760)	6/19/2002 6:16:19 PM
From: tejek	Respond to of 1580482

If you haven't noticed, AMD is already dropping Duron. Watch as Intel raises the bottom on low-end CPU prices to compensate for the inevitable drop in server margins. Ten, AMD would be foolish to allow themselves to get stuck in a segment of the CPU market like they were a few years ago. There is no way AMD could compete effectively with INTC and make money......and it didn't. Having a CPU with the quality of the Athlon's design was a major breakthrough and IMO it would be a huge mistake to get scared and back track now because INTC has started a price war just as pc market demand has collapsed. The whole business model of AMD is to try and reach equivalence with Intel in some profitable market segment, then sell at a discount. As usual, this strategy is based on the hope that Intel would want to prioritize profit margins over market share. Wishful thinking, at best. INTC once did prioritize profit margins over market share but can't do that now because of the Athlon platform. This will be a case study of how NOT to build a strong business. My alternative? Start with marketing and cementing relationships with customers. Provide products and services that the incumbent won't want to provide. Make a small fortune that way, then expand slowly. Never start a price war with the incumbent; instead, defend yourself against any price war that the incumbent will wage against you. (Matching price drops is not a viable defense.) If AMD came up with a CPU in any niche of the PC and networking/telecom markets, INTC would be all over them like a bee on honey. AMD must compete with INTC on a equivalent basis, or close up shop. It may look for niches outside the two sectors that INTC dominates to balance off their product lines but the markets for CPUs and networking chips are too big to ignore. AMD might want to consider thinking outside the box if they want to survive this. How do you think AMD got the Athlon platform? Sanders has always thought outside the box......the problem is is that INTC is a formidable competitor and most people would have been too intimidated to take them on. ted