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

To: Paul Engel who wrote (25439)	11/1/1997 2:33:00 AM
From: Investor A	Respond to of 1579826

No comments towards the mental!

To: Paul Engel who wrote (25439)	11/1/1997 11:13:00 AM
From: Al Seim	Read Replies (2) \| Respond to of 1579826

Paul & all: While AMD's marketing types ought to know a lot more than me about pricing structures, it sure seems to me that they have over-generalized Cyrix' bad experience with head-to-head pricing vs. Intel. Cyrix had a CPU with some compatibility problems, and tried to price it roughly on a par with Intel's equivalent (integer performance) mainstream CPU and got a drubbing. AMD, OTOH, has a fully compatible product, closer to a PII than a Pentium MMX in integer performance, and they make the odd decision to peg its price 25% less than the lesser, older product. 25% less than the equivalent PII would have made more sense to me (i.e. K6-233 = .75*PII-200). Tying their star product's price to the market leader's semi-obsolescent 2nd tier strikes me as asking for a price war. We're just lucky (as shareholders in either company) that Intel didn't see this as an invitation to hold a "Free Pentium" month or two. Perhaps if PII had taken off a bit faster, they'd have done just that, and perhaps they're doing a bit of it even so. Perhaps I'm wrong, and AMD is executing a calculated Japanese-style "buy market share now, make money later" plan, or perhaps you really do have to undercut this far to attack a 90% market leader, but it doesn't seem right to me. BTW, I realize that the problem of the moment is production, not pricing, but this pricing issue has bugged me for months. Al Seim