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To: Petz who wrote (1776)	10/28/1997 3:44:00 PM
From: StockMan	Respond to of 6843

P, Re -- They were the low cost producer but the other airlines had more flexible pricing and killed them by matching the low price for the few people that cared and overcharging those who didn't. Actualy you may be right. AMD's target and only market are the hobbyists. They don't care about the prices. But then again how many hobbyists are there in the world, 1 or 2 million? After that AMD will have to close shop. Stockman

To: Petz who wrote (1776)	10/28/1997 9:45:00 PM
From: Paul Engel	Read Replies (1) \| Respond to of 6843

Petz - Re: "IMO, Intel will shoot themselves in both feet this quarter." Last quarter, Intel did the same - introduced SEVERE price cuts. Intel's Q3 CPU unit sales volume were up and their margins were down only slightly - 3 or 4%. Intel attributed that decline to FLASH pricing, for whatever that is worth. On the other hand, AMD lost $67,000,000 (-$31,000,000 after a tax rebate). Thus, AMD was severely hurt - probably compounded by their own yield problems. Intel is doing the same thing this quarter - but they are REDUCING THEIR COSTS almost as fast as they are cutting prices - higher yields, better equipment utilization, more wafers processed/fab which results in lower unit costs. They are agressively switching customers to Pentium II this quarter - up to 45% of unit shipments. Tillamook sales (0.25 micron Tillamook) will add real profits since it sells at a premium but small die size results in lower die costs. Intel has predicted Q4 revenue will be flat to slightly up as will be profits. We'll know in January! Paul