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

To: Joey Smith who wrote (52626)	3/15/1999 9:19:00 AM
From: A. A. LaFountain III	Read Replies (1) \| Respond to of 1574005

Re; Supply Trouble A couple of thoughts on supply: 1) I believe that IDC is now pegging PC units in 1Q at up 14% year/year, but down 14% qtr/qtr. 2) We know that AMD's MPU supply is likely to be down >= 10% qtr/qtr, but even the <= 5MM unit rate is still a triple from 1Q98. 3) Highly unlikely that Intel's qtr/qtr production capacity has slipped. 4) Ergo, high degree of likelihood that 1Q99 MPU supply growth > demand growth. But how about demand growth? 1) Pricing on AMD-based systems continues to run well below equivalent Intel-based systems. 2) My (admittedly small scale) checks over the weekend with clerks at several PC retail vendors had a uniform response that customers' concerns about reliability differences between Intel and AMD have receded to noise (I would venture that the initial perception was not based in fact and that the wealth of evidence that has accumulated in regard to this "issue" has eroded the value of the "Intel Inside" intangible). Value has become an overarching consideration within this market. I believe that the disparity of the price declines that you cite could well be due to supply considerations, but if that were the case, then consumers (and the OEMs that build their machines) would simply switch to the equivalent part available from another vendor. So either Intel would be flooding the market with parts, or OEMs continue to vote with their dollars in favor of the higher margins that may be present with the K-6-2. My conclusion is that I'm not sure that any of us can come up with the "correct" reason/reasons for this movement. One thing that does jump out is that the claim that AMD would endure a precipitous drop in its ASPs due to some parts being marked down to $40 seems unlikely. The other thing that jumps out is that it sure is a wonderful time to be a PC consumer. - Tad LaFountain

To: Joey Smith who wrote (52626)	3/15/1999 5:58:00 PM
From: Mani1	Read Replies (1) \| Respond to of 1574005

Joey Re <<I think the K6-2 400 is still not priced low enough to where it needs to be. In other words, there still is supply trouble.>> So does that mean that when Celeron was priced higher than k6-2, there was a supply problem with Celeron? How about K6-2 450 Vs Pentium II 450, is there a supply problem for PII 450? The point is, your assumption that consumers buy PC based on some specific benchmark is not correct. Demand is based on many other factors beside one specific benchmark. You can also interpret the pricing discrepancy on the assumption that consumers rather have an "AMD K6-2 with 3D Now!" more than an "Intel Celeron". Who knows what the real reason is and whether it is justified. Mani