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

To: Petz who wrote (247791)	2/14/2008 2:38:27 AM
From: graphicsguru	Read Replies (1) \| Respond to of 275872

For those who doubt that eliminating AMD would cause prices to rise . . . . I don't see how any rational person could argue against the notion that competition between AMD and Intel has resulted in better value to the consumer than would have been the case otherwise. In fact, it's obvious that if AMD were more competitive now, we'd be getting more value per dollar from Intel. Core 2 in all its flavors has a whole lot of overclocking headroom. If pushed, Intel could give us all an extra speed grade or two for our money. All they'd have to do is stop down-binning their chips. But they haven't stopped. Why is Intel down-binning? Because they think they make more money that way. They've carefully studied the price elasticities, and this maximizes their profit. The weaker AMD gets, the greater Intel's freedom to down-bin becomes. In the extreme, if AMD goes the way of Via, then Intel has no reason to improve the performance of Celerons. Over time, the gap between the performance of the high-end chips and Celerons can increase to the point that a much larger fraction of consumers/businesses will be willing to pay $200 for the difference. And then you will see Intel's profits rise dramatically.