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To: T. MARINO who wrote (4650)	3/1/1998 11:51:00 PM
From: StockMan	Respond to of 6843

TM, Re -- If AMD has such excess demand, then why don't they charge a higher price per chip? The excess demand comes in part because of the low price (much less than the 25% advertized price for compaq). Remember the salesman direct customers to products where the salesman and the store can get the most money. Any increase in AMD's price, cuts into the salesmans commissions and makes it less of an incentive to sell AMD's products at the store. You see AMD shouts demand, but if cost/performance were close between AMD and Intel , people would naturally buy the brand name product. Stockman

To: T. MARINO who wrote (4650)	3/1/1998 11:53:00 PM
From: Elmer	Respond to of 6843

<If AMD has such excess demand, then why don't they charge a higher price per chip? Why not charge say 15% less than Intel rather than the current 25%? > IMO, the market perceives that AMD offers an inferior product, therefore AMD must price it accordingly. AMD's position seems to confirm this view. I do not believe the claims of excess demand. EP

To: T. MARINO who wrote (4650)	3/1/1998 11:54:00 PM
From: Joey Smith	Respond to of 6843

T. re:What am I missing? What you are missing is that AMD adds no value, except for lower prices. In Jerry's own words, they want to be the alternate supplier of x86 chips...They command no value premium, so they have to compete based on lower prices to the market leader. Why would an OEM switch (resulting in switching costs as well as a great deal of risk)? Basically, the market dictates what prices AMD can fetch with the K6. AMD chose a 25% discount because their research told them that this is the best price to get OEMs to switch...Unfortunately, their cost structure is such that they can't make a dime with this strategy. Maybe they can command a premium with the K6-3D...but i doubt it. joey

To: T. MARINO who wrote (4650)	3/2/1998 2:20:00 AM
From: greg nus	Read Replies (2) \| Respond to of 6843

Marino, Your missing market share. AMD is going for market share. AMD quessed wrong. First AMD quessing it could make a lot of chips in 97. told everyone so. At the beginning of 97 AMD waht little production it could make into the same somewhat weak market as Intel pentium, and then PentiumII. To get anyone to notice the K^6, after the K^5 fieasco AMd sold it'self short comming up with the 25% discount, which in reallity grew to 35% to 45% to some buyers like compaq. then came the Asian slowdown and the yield problems. In hind sight AMD would have been better to slug it out with Intel at parity given they had so little production it would have generated enought to show a profit. Now that AMd blew it's 97 profitplan and incurred all the damage visa ve stockmelt(tm)(new name for stockman)down AMd reassessed based on the sucess of the sub-1000 sucess decided to go for market share. AMD reduced profit plan for 98 continues to be held in jeperdy by the yield problems whic persists... beleive me if AMD ahd it solved and they may be close Everyone in the Industry would know. AMD continued silence on the subject and inability to estimate production is defacto affrimative confirmation the yield problems persists. The longer the yield problems persist the sooner AMD runs out of cash. Good new is credit is cheap and AMd could avert the necessity of protection of bankrupcy by yet another round of debt to make ends meet. Unfortunatly doing so would further place AMd at cost competitive disadvantage to Intel's near zero cost of capital all cash ability. Even though potential filing for protection from it's creditors is possible for AMd, I would assign a low probability of it happening. As I have previoulsy stated if AMD was dead serious about putting a dent in Intel One way it could would be to take off the gloves and be like a startup air carrier and operate out of bankrupcy with a zero cost of capital, just like Intel. of coarse AMd would need some complelling technology to offer to make it work. the reason AMD won't do this is Sanders he could not get his ego to go along. could you seee Jerry operating form bankrupcy for two to thre years as he grew marketshare at intel expense.