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

To: Jadrew who wrote (45768)	1/13/1999 6:33:00 PM
From: Tenchusatsu	Respond to of 1572887

<Let's see, they missed the estimate by 3 cents.> Think, investors were "expecting a surprise." It doesn't make any sense, since if you're expecting a surprise, it's no longer a surprise. But still, they were hoping that AMD would have blown past estimates like Intel did. <Who really thinks Intel can continue to "price match" in the low end market (Celeron - which you can overclock) and continue selling their high ends with big margins ? There aren't that many morons willing to pay the different. What's going to happen to INTC's margins ?> First of all, Celeron overclocking isn't a guarantee. And only a small percentage of users out there actually try overclocking. It might seem like more, but that's only because those who successfully overclock are the ones making the most noise on the Net. Second, I think Intel is well aware of the Celeron vs. Pentium II issue. When Tom Kurlak asked in the INTC conference call about the performance similarities between Celeron 400 and Pentium II 400, Otellini (I think) said that the differentiation will return with the Pentium III launch. Third, platform is key. Even though Celeron 400 and Pentium II 400 may be close to each other in terms of performance, the Celeron usually appears in lower-cost computers, where the components are cheaper and slower, while the Pentium II only appears in computers that are decked-out with features and high-quality components. This is part of Intel's successful market segmentation strategy. The K6-2's reputation also suffers because it too is featured in systems with lower-quality components. Consider the following quote from Michael Miller of PC Magazine: "It's more interesting to compare the 400-MHz Celeron with AMD's new 400-MHz K6-2 processor with 3DNow! Technology. We saw a Compaq Presario 5190 Internet PC, the first system on the market with this flavor of K6-2 (click for more). Given that the 5190's graphics and disk subsystems were less capable than the Celerons we tested, we weren't surprised by its 19% lower Winstone test score." zdnet.com This is how Intel is able to keep margins at healthy levels while AMD's own ASP suffers. Tenchusatsu