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

To: Joey Smith who wrote (44511)	1/1/1999 12:34:00 PM
From: Brian Hutcheson	Read Replies (1) \| Respond to of 1572208

Joey , can you explain how AMD got caught with its pants down When AMD released the K6-2 400 , 2 months before Intel ? Also when AMD's K6-3 is released this quarter they will be able to gain access to the higher ASPs of PII . That means that AMD can drop the K6-2 price undercutting Intel , remember K6-2 cost is $35 so they can sell those CPUs at $50 or so if they have the higher ASPs of K6-3 to bring good profitability . What you are forgetting also is that AMD does not have to make the enormous sales and earnings of Intel since it has less than a tenth of its shares and a quarter of its stock price . This means that all AMD has to do is make 5% or more of Intel's profit and to grow that profit to be a very successful company . Do I think that they can do it ? You betcha . Brian

To: Joey Smith who wrote (44511)	1/1/1999 1:13:00 PM
From: Bill Jackson	Respond to of 1572208

Joey, It is an action response game and any move by one always catches the other unawares. Intel drops, AMD responds, twas ever thus when AMD is the follower in this game. The market leader leads and bears the greater loss in exchange for the damage done the the smaller player. Price wars between equals hurt equally. If AMD has 10% share and prices drop by 10% then 90% of that cost accrues to the Intel bottom line and 10% to AMD. Intel hopes to use high end CPU profits to cripple AMD. A few errors by Intel gave AMD a crack to slip through and nor the box makers see the desireability of keeping AMD alive and will keep giving them a share regardless as they have seen the nice price drops that the war has produced and do not want the war to stop or be won by Intel as otherwise all that money falling to CPQ bottom line would drop to Intel bottom line. Bill