Well, well, AMD's really gotten themselves in a pickle this time. I forsaw ( a few months ago) that this would happen to AMD. I bet all of you AMD chiptroopers just love the low prices of Athlons. I mean, why else do you buy Athlons? AMD has made a BIG mistake in selling Athlons at such low prices. The consequence is that AMD isn't making any profits, even if they sell a ton of Athlons. For example, on pricewatch, an XP1600+ is $52. Do you seriously think AMD actually makes a profit on that CPU at that price? I sure don't. According to many analysts and web sites, in terms of raw manufacturing costs, to make an Athlon or P4, it costs about $23 US. Now, this is purely the manufacturing cost. Add in the price of an HSF, say another $10. Now, that's $33. Add in the packaging, say another $5. That $38. This is of course, a rough estimate. I'm taking into account the lowest possible prices for these. Now, lets not forget each CPU has to be tested, and that costs money. For example, lets say it for AMD, about $10 is onto the price of every CPU for testing. That brings us to $48 for a CPU that's ready to be shipped. If you include the shipping charges, then each CPU is about $60. Now, you still need a higher price in order to make a profit. So, if AMD sells it XP1600+ at $52, I don't see there's any way in which they're actually making a profit. Intel on the other hand, makes a nice profit, and I believe right now it actually costs Intel <b>less</b> to manufacture each CPU, compared to AMD, since Intel is now on 300mm wafers. AMD has to change their business plan, and also change it's prices, or they are going to collapse.
Now, lets get on to other stupid mistakes AMD has made which resulted in this mess. In August, they paper launched the XP2400+, and XP2600+, and so far I have yet to see them in any stores. Also, AMD started its $28 Million "AMD Me" AD campaign, which so far, I have only seen on techie sites, like THG. So, in other words, AMD threw $28M out the window by targetting the same fanboys with ADs, that already know about AMD. To add insult to injury, AMD has recently paper launched the XP2700+ and XP2800+. They 2400, and 2600's aren't even available yet, and still, AMD paper launches the 2700, and 2800. To make things worse, the XP2800+, combined with an nForce2 and DDR 333 memory, STILL cannot take the performance crown, even though it now has a 333mhz FSB. So, the 2800 which isn't supposed to come out for another 3 months, cannot outperform the 2.8P4 (even with the amazing performance of the nForce 2), which has been out for over a month. AMD has now done 2 paper launches back to back, and wasted money on that add campaign. In it's 30 year history, Intel has never done anything as stupid and humiliating as this. AMD' stock price is rock bottom.
With all this in mind, there are still a few rabid fanobys out there that have the nerve to say Intel is in a similar position. HELLO! AMD has downgraded revenue to $500 million, and they are expected to have an operating loss this quarter. On top of that, AMD only has about 1 billion US in cash left, which wil only last AMD for another few months. AMD's stock is at like 3.63, while Intel's is at about 13.84. Intel, last quarter, had a revenue of <b>25 billion US</b> which is enormous comapred to AMD's revenue. Intel can survive this kind of recession, AMD cannot. Simple as that. Also, if my estimate is correct, then AMD will paper launch the clawhammer right before christmas, desperately trying to get support and pre-orders for the clawhammer. That would really make alot of people angry. People would be sick and tired of paper launches, and if AMD actually did that, it's stock would probably plummet below $1. Intel is only going to make thing harder for AMD. In Q1 of next year, Intel has a whole whack of new CPU's being released. Not to mention the fact that they could do an early release of Prescott, since all of Intel's roadmaps and releases seem to be accelerating. The clawhammer won't be out in volume until Q2 of next year, according to AMD. Personally, I'm doubtful of whether AMD can last that long.
In short, if AMD does one more stupid move, they're done for.
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<font color=green>All good things must come to an end … so they can be replaced by better things!
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