Another AMD Athlon/Sempron Price drop

r0ck · Feb 1, 2007

http://jonnyguru.com/news_details.php?id=172

ajfink · Feb 1, 2007

Geez, R600 better be great for AMD to salvage Q1.

BaldEagle · Feb 1, 2007

Too late to salvage Q1 with R600. We haven't even heard of a firm release date hard to generate revenue on rumor.

turpit · Feb 1, 2007

I would like to see what P4's are doing.... AMD is still competing against those as well, if Intel is simply writing that inventory off more or less, they may be just slashing and burning....

http://labs.anandtech.com/alllinks.php?pfilter=2858

This is odd .... I don't see nearly as much price movement in any Intel line up.... What the heck is AMD doing.... are they trying to lose money?

If those prices are accurate, it looks like AMD is "pushing" back, intent on taking a firm grip on the value crown. All hail the megaslopoly

CaptRobertApril · Feb 1, 2007

Price War

Retailers in the same line of business continually trying to underprice each other, sometimes below actual merchandise costs, as a competitive strategy to attract customers. Price wars result in low profits and often in bankruptcy.

- Barron's.

m25 · Feb 1, 2007

I would like to see what P4's are doing.... AMD is still competing against those as well, if Intel is simply writing that inventory off more or less, they may be just slashing and burning....

http://labs.anandtech.com/alllinks.php?pfilter=2858

This is odd .... I don't see nearly as much price movement in any Intel line up.... What the heck is AMD doing.... are they trying to lose money?
What would P4s be?

turpit · Feb 2, 2007

I would like to see what P4's are doing.... AMD is still competing against those as well, if Intel is simply writing that inventory off more or less, they may be just slashing and burning....

http://labs.anandtech.com/alllinks.php?pfilter=2858

This is odd .... I don't see nearly as much price movement in any Intel line up.... What the heck is AMD doing.... are they trying to lose money?

If those prices are accurate, it looks like AMD is "pushing" back, intent on taking a firm grip on the value crown. All hail the megaslopoly

Well, the strategy doesn't make much sense but it rationalizes the movement in ASPs and share value.... lower volume in the high end but higher margins vs higher volume in the low end but way lower margins.

It would appear AMD wants share above profits --- but one could argue that about Intel. However AMD's ASP is 79 bucks, Intel's is 130 bucks... they don't have much room to fight.

Yup. It looks like Intel was scared of AMD, and now AMD is scared of Intel. last fall the channel was berefty of AMDs. Demand exceeded supply on many SKUs. But that started changing in Dec and those empty AMD shelves started to gain a little wieght, according to what Ive read. For AMD, right now, I would think ASPs of $79 are a much les bitter pill to swallow than unsold products. AMD will be better off showing its stockholders a steady or increasing marketshare rather than bigger profits and a shrinking share. Both you and Baron have said it many times, AMD is used to operatiing in the red. A few extra bucks in their pockets right now wont help them nearly as much as the biggest chunk of market they can grab/hold onto for the long haul. I think they realize their 2 quarter post C2D "grace" period is over, and the upcoming quarters are going to be bitter battles. Sometimes you have to make short term sacrifices and throw a few battles for the overall good of the campaign. If these prices are for real, that looks to be what AMD is doing. The sad thing is, they are a year late. They should have been cutting prices 1 year ago to try a force a more rapid market expansion, but instead they got gready and opted for a few extra bucks. They may very well pay dearly for that mistake in the comming months.

piesquared · Feb 2, 2007

I would like to see what P4's are doing.... AMD is still competing against those as well, if Intel is simply writing that inventory off more or less, they may be just slashing and burning....

http://labs.anandtech.com/alllinks.php?pfilter=2858

This is odd .... I don't see nearly as much price movement in any Intel line up.... What the heck is AMD doing.... are they trying to lose money?

If those prices are accurate, it looks like AMD is "pushing" back, intent on taking a firm grip on the value crown. All hail the megaslopoly

Well, the strategy doesn't make much sense but it rationalizes the movement in ASPs and share value.... lower volume in the high end but higher margins vs higher volume in the low end but way lower margins.

It would appear AMD wants share above profits --- but one could argue that about Intel. However AMD's ASP is 79 bucks, Intel's is 130 bucks... they don't have much room to fight.

Yup. It looks like Intel was scared of AMD, and now AMD is scared of Intel. last fall the channel was berefty of AMDs. Demand exceeded supply on many SKUs. But that started changing in Dec and those empty AMD shelves started to gain a little wieght, according to what Ive read. For AMD, right now, I would think ASPs of $79 are a much les bitter pill to swallow than unsold products. AMD will be better off showing its stockholders a steady or increasing marketshare rather than bigger profits and a shrinking share. Both you and Baron have said it many times, AMD is used to operatiing in the red. A few extra bucks in their pockets right now wont help them nearly as much as the biggest chunk of market they can grab/hold onto for the long haul. I think they realize their 2 quarter post C2D "grace" period is over, and the upcoming quarters are going to be bitter battles. Sometimes you have to make short term sacrifices and throw a few battles for the overall good of the campaign. If these prices are for real, that looks to be what AMD is doing. The sad thing is, they are a year late. They should have been cutting prices 1 year ago to try a force a more rapid market expansion, but instead they got gready and opted for a few extra bucks. They may very well pay dearly for that mistake in the comming months.

Yes but then they wouldn't have as much room to manuever once C2D arrived. Remember, they were still competing against the insainly cheap netburst dual cores. And besides, they couldn't supply much more of a market share anyways, at that time. With the 65nm transition, now they can. I think AMD anticipated C2D performance and needed to capitilize on the market share they won and prepare for price cuts. And another thing to remember is that they had been planning the aquisition of ATI and needed capitol, which price wars certainly to not generate. Now is when they can concentrate on taking market share with low prices.

turpit · Feb 2, 2007

I would like to see what P4's are doing.... AMD is still competing against those as well, if Intel is simply writing that inventory off more or less, they may be just slashing and burning....

http://labs.anandtech.com/alllinks.php?pfilter=2858

This is odd .... I don't see nearly as much price movement in any Intel line up.... What the heck is AMD doing.... are they trying to lose money?
What would P4s be?

Unless there is still a huge 'perceptual' in balance of the price/performance ratio, I do not fully grasp why AMD is cutting prices yet again. Intel did not cut prices, which is what prompted me to ask 'what are the P4's doing (in terms of price)', no movement at all.

Intel is in a slightly better position for the price war from a market stand point, they have this stock pile of P4's that are worth almost nothing to them they have been sitting on the books for so long --- I could see Intel start selling the 805 D for 40 bucks, and a clearance sale on the remaining P4 material at 100 bucks or less in the future, just to get rid of it...

Unfortunately for AMD, Joe 6-pack sees more or less price and not so much asking the question -- 'Is what I am buying any good relative to x'.... this is precisely why AMD gained share but margins fell, and ASP fell last quarter. All Intel has to do is drop P4's, use C2D to hold ASP and margins up and make AMD feel miserable in the DT side at least.

I am simply wondering why AMD felt compelled for a fresh round of cuts at this point.... P4's prices have held steady.

Jack

Just MO, but I would guess declining sales (if that info is to be believed) are scaring them or rather scaring Ruiz. I dont believe AMD is going to continue expanding overall market share during the next few quarters. Just MO, but I think they may see shrinking shares. Sharikooks ramblings aside, I think at this time everyone understands the C2D is the superior product. Its been 6 months, all the "cooked benchmark" rumours have been put to bed, and no "dirty little secret" flaws have reared their ugly little heads. I would say the general market is comfortable that C2D is exactly what Intel hyped it to be, and are ready to start jumping on the bandwagon wholesale. Again, just MO. AMD, or Ruiz must feel they need something positive to retain the progress they've made:....either performance or value. They simply cant have performance with K8 right now and the QFX gambit failed abysmally. The only thing they can do is try to offer better value. I dont think AMD even consider P4 as serious competition, so he only way to improve value is to lower prices to relative to C2D. If the price cuts are true, it will make several AMDs CPUs the clear choice for value (at least short term). Intel can easily lower its prices to take that value metric back, but Im guessing this is a preemptive strike on AMDs part to forestall impending market loss and minimize the decline prior to the arrival of K8L, which a few unproven claims aside, is still a mystery

turpit · Feb 2, 2007

I would like to see what P4's are doing.... AMD is still competing against those as well, if Intel is simply writing that inventory off more or less, they may be just slashing and burning....

http://labs.anandtech.com/alllinks.php?pfilter=2858

This is odd .... I don't see nearly as much price movement in any Intel line up.... What the heck is AMD doing.... are they trying to lose money?

If those prices are accurate, it looks like AMD is "pushing" back, intent on taking a firm grip on the value crown. All hail the megaslopoly

Well, the strategy doesn't make much sense but it rationalizes the movement in ASPs and share value.... lower volume in the high end but higher margins vs higher volume in the low end but way lower margins.

It would appear AMD wants share above profits --- but one could argue that about Intel. However AMD's ASP is 79 bucks, Intel's is 130 bucks... they don't have much room to fight.

Yup. It looks like Intel was scared of AMD, and now AMD is scared of Intel. last fall the channel was berefty of AMDs. Demand exceeded supply on many SKUs. But that started changing in Dec and those empty AMD shelves started to gain a little wieght, according to what Ive read. For AMD, right now, I would think ASPs of $79 are a much les bitter pill to swallow than unsold products. AMD will be better off showing its stockholders a steady or increasing marketshare rather than bigger profits and a shrinking share. Both you and Baron have said it many times, AMD is used to operatiing in the red. A few extra bucks in their pockets right now wont help them nearly as much as the biggest chunk of market they can grab/hold onto for the long haul. I think they realize their 2 quarter post C2D "grace" period is over, and the upcoming quarters are going to be bitter battles. Sometimes you have to make short term sacrifices and throw a few battles for the overall good of the campaign. If these prices are for real, that looks to be what AMD is doing. The sad thing is, they are a year late. They should have been cutting prices 1 year ago to try a force a more rapid market expansion, but instead they got gready and opted for a few extra bucks. They may very well pay dearly for that mistake in the comming months.

Yes but then they wouldn't have as much room to manuever once C2D arrived. Remember, they were still competing against the insainly cheap netburst dual cores. And besides, they couldn't supply much more of a market share anyways, at that time. With the 65nm transition, now they can. I think AMD anticipated C2D performance and needed to capitilize on the market share they won and prepare for price cuts. And another thing to remember is that they had been planning the aquisition of ATI and needed capitol, which price wars certainly to not generate. Now is when they can concentrate on taking market share with low prices.

Yes that true, but for ex what would the difference have been cutting a $200 X23800 to $148 vs cutting the $282 x23800 to $148. The bottom line was the same. Yes, they would have enjoyed lower profits in the preceding 6 moths, but that would have been offset to some extent by increased volume, and more importantly it would have expanded their share, further solidifiying their foundation.

IRT the insanely cheap netburst cores, AMD was taking market share even with higher prices. Lowering their prices would have increased their take against netburst. The average consumer didnt (and may very well never) know how crappy netburst was. But the enthusiasts and the IT community did. AMD was already working its way deeper into those areas, but Jo Shmo still only knew "genuine Intel Inside" Lower prices would have both deeped existing inroads as well as open new ones.

As for their capacity, it wasnt really that demand limited prior to the Dell deal. That introduced a totally new aspect to the situation, and along with whatever production problems they were having on the high end products (low yields, slow ramps or Uarch problems, whatever)it crippled the supply of those chips to the channel as well as drastically thinning everything else. So AMD put themselves into the capacity conudrum, and knowingly so. They wanted the Dell deal, they knew the consequences and in their opinon, the loss of abilty to supply the channel was offset by the gains of the Dell deal. IMO they were correct. However, prior to that, they were in a good position to expand share further, even if only by a small amount. And any share they gained then, would have probably been stable for a few years. Instead, they lost prospective buyers with unattractive prices.

TMSter · Feb 2, 2007

Sounds like they are trying to make room.

qcmadness · Feb 2, 2007

Their inventory level is about half a quarter.
It does not make sense for them to clear the inventory

CaptRobertApril · Feb 2, 2007

Their inventory level is about half a quarter.
It does not make sense for them to clear the inventory

Yes it does. To make it easier for the bankruptcy trustee! :lol:

qcmadness · Feb 2, 2007

Their inventory level is about half a quarter.
It does not make sense for them to clear the inventory

Yes it does. To make it easier for the bankruptcy trustee! :lol:

If AMD bankrupts, I don't think I can buy anymore cheap CPUs anyway.

CaptRobertApril · Feb 2, 2007

Their inventory level is about half a quarter.
It does not make sense for them to clear the inventory

Yes it does. To make it easier for the bankruptcy trustee! :lol:

If AMD bankrupts, I don't think I can buy anymore cheap CPUs anyway.

There was this budget Canadian airline called JetsGo. They were doing the typical budget airline marketing of selling coast to coast tickets for the cost of a Mars bar. Everyone complained that they were packed in like sardines in decrepit jets with the customer service of the Gulag, but that didn't stop them from buying tickets. Because management was drawn from Montreal's Lobotomy Club the airline went teats up. The next day, the other two Canadian major airlines damn near doubled their prices on every seat.

We can only hope and pray that AMD stays in biz for a good long time!

monkeymanuk · Feb 2, 2007

Everybody is anticipating that AMD is going to have a couple of really bad quarters due to the lack of competition at the high end with C2D. AMD may take advantage of these low expectation by keeping ASP lower for the time being.

Undercutting Intel would seem the only way to ensure that AMD can retain and perhaps even increase market share in the coming months.

I'm not sure on Socket AM2, AM2+ and AM3 backwards compatibility but it would make sense to get as many boards as possible out there that can take an easy upgrade.

Just a thought!

sprite · Feb 2, 2007

I doubt the R600 would be able to save AMD, a small market compared to CPUs and Intel already own most of the graphics card market (through intergrated solutions)

LordPope · Feb 2, 2007

ADD this post

to what Charlie is saying
http://www.theinquirer.net/default.aspx?article=37390

It sounds like AMD is clearing Inventory for the K8L

i smell a early paper release in about 6 weeks

turpit · Feb 2, 2007

How interesting the horde is.

on AMD availability:
Horde Pro spin- The channel is empty because demand is high

On AMD price cuts -AMD is clearing inventory. For K8L. 4~6 months before availabiliy.

Well, which is it. Is the channel empty because demand is high, or is AMD dropping prices to increase demand and empty the channel.

Non fanboys want to know.

Lordpope.

There has been some logical if opposing disscusion going on here. Your addition to the voicing of opinions in anything but logical.

Demand for AMDs has been at the very least, solid. The channel is not anywhere near full, which in and of itself negates your theory that AMD is "clearing inventory". Further, K8L is still to far off for AMD or retailers to start worrying about Stock On Hand. Once K8L does arrive, it will still need to ramp, not to mention expand to fill AMDs entire range of SKUs. Finally, as Jack has pointed out, there are perspectives from which cutting prices is illogical. "Clearing the channel" is an illogical perspective, as it would mean demand outstriped capacity, and prices have been lowered farther than required to achieve and maintain the optimal supply-demand balance.

For possible logical reasons AMD might be doing this, see all the other posts but yours.

Another AMD Athlon/Sempron Price drop

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