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

To: Thomas M. who wrote (57551)	5/7/1999 1:21:00 PM
From: Tenchusatsu	Read Replies (1) \| Respond to of 1571690

<It is pretty obvious that the K7 will be a big success due to the price-gouging currently present in the serve/WS market.> That's pretty hard to argue for because you have to look realistically: 1) The RISC competitors, most notably Alpha from Compaq/Digital, have been dropping their prices in order to come closer to the price/performance ratio of Xeon. There isn't much "price-gouging" left in the server and workstation market. 2) AMD won't be able to differentiate against Intel except in price of the CPU alone, which is only one factor in the entire price of a server. Intel already brought the high-volume dynamics of the x86 infrastructure into servers and workstations, which is why Xeon is so successful against RISC. That originally translated into big cost savings, until the RISC competitors started slashing their own prices. Meanwhile, AMD only brings a possible 25% discount in the CPU alone. I already demonstrated how that 25% discount translates to a mere 10% discount in a typical 4-way server. That's not much of a differentiator when it comes to servers. 3) Worse comes to worse, Intel has a lot of room to start slashing prices on Xeon. To heck with crazy margins; Xeon still represents a fraction of Intel's overall CPU business, and besides, Intel is diversifying anyway, so a hit in the profitability in one area isn't going to drag the whole company down. On the other hand, AMD is highly dependent on the K7. If AMD starts that self-destructive 25% CPU discount again, Intel will swiftly answer the challenge. Guess who's going to succeed? Tenchusatsu