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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Dan3 who wrote (174963)	7/3/2003 11:06:23 AM
From: Windsock	Respond to of 186894

Floperons Gather Dust Bunnies theinquirer.net Opteron uptake slower than AMD hoped Stocks building, CPUs gathering dust bunnies By Jack Russell: Thursday 03 July 2003, 10:45 ABOUT TEN DAYS BACK, AMD lowered its second quarter revenue projections from $715 million $615 million dollars, as we reported at the time. This is a substantial hit for a company already deeply in the red. Sources we've spoken to inside the company have confirmed that the main reason for this hit is lower-then-expected Opteron sales, due partially to the motherboard shortage we reported on earlier this month. It hasn't helped that second quarter sales are seasonally low in the computer market, but a company in AMD's current financial condition can't afford to bend to the rules of the game when it comes to losing money due simply to seasonal dips in demand. Intel, of course, would love to howl and point fingers that this is proof that Opteron demand isn't what AMD hoped it would be, but fortunately there's at least some evidence to suggest Sunnyvale's Opteron sales are beginning to tick upwards as we approach Q3 and motherboard availability rises. The trick will be finding out whether or not the rise is temporary, how to best sustain its growth, and how to balance the price with AMD's growing need to pull itself out of a financial black hole before it tips over into the event horizon. With AGP support finally arriving for both 1P and 2P Opteron-based systems we may see increased adoption into the workstation range, but high CPU prices could keep sales down in this market as well. A 1P Opteron 144 (1.8 GHz) is $670, compared to $827 for an Opteron 244 (this last according to Pricewatch). That's not much of a difference and currently is markedly more expensive then Intel's Xeon 3GHz. However, Intel is dropping its Xeon prices on the 13th of July and also introducing a 1MB cache Xeon. Considering that 32-bit performance is still where the vast majority of software runs, AMD might consider pricing its top-of-the-line Opteron's a bit closer to the Xeon in order to gain a greater advantage in the marketplace. Users looking to build Opteron systems either for personal use, workstation applications, or x86-64 programming would do best to examine the 140 and 240 Opteron models, both of which retail for under $300. You can, in fact, buy two 240 processors for less than the cost of a single 242 CPU. One reason AMD is reluctant to lower its prices is because of the proven customer connection between price and quality. It's been repeatedly demonstrated that the human mind, upon paying a premium for a product, will seek to justify the premium by demonstrating ways in which the current product is "better" than the competition. This explains quite a bit of Apple's popularity. AMD, at this point, is waging a dual-front war to raise its average sale prices and its new image as a provider of top-of-the-line CPUs. Maybe this won't prove too much for the company to chew at once. With more chipsets arriving and faster CPU models on the way, Opteron should be a much more interesting option 30-60 days from now, which should in turn boost CPU adoption and give AMD's bottom line a substantial kick — at least that's what Sunnyvale hopes. µ