AMD...can I use a lifeline?

[mjolnir2k]

My favorite chip maker has been taking a pretty substantial financial beating in the past few months and have posted some serious losses (146 MM in Q1) but I am hopeful that a lifeline seems to be on the horizon:

The upcoming quarter will be an important one for AMD's products as it launches several new chips, including the latest version of its much-anticipated Opteron next week.

"The new Opteron family is perhaps the single most important launch ever in the history of the company," said Chief Executive Hector Ruiz.

I will have my fingers X'd. We need to have AMD stick around to keep the chip technology moving forward as quickly as we have all gotten used to.

 

[AtomicDude512]

We do need AMD, mainly because if they die, Intel can set CPU prices at whatever they want! That would be bad...

Plus Intel keeps lowering the IPC on their chips which is making them worse for gaming.

 

[Malladine]

I totally agree. We do NOT need any Microsofts in the hardware industry! :frown:

Competition is all important for us consumers and, as you mentioned, for the advancement of technology in general.

 

[Jeff7181]

Ya know how they come up with a loss? They estimate what they think sales will be like, and if sales are below that, they call it a loss. They didn't loose money, they just didn't make as much as they estimated.

 

[SexyK]

Umm... I'm pretty sure they are losing money. I have a hard time believing they are profitable right now. If you have a link, I'll read it, but I seriously doubt they're making money. Also, the top desktop chip from intel has almost always been in the $640 range, no matter what the competition is doing. It's some magic number at Intel for some reason, I can't remember the story behind it. Maybe someone can fill us in. Son't start thinking that without AMD INtel would be charging $2000 for their chips, we all know that's rediculous.

 

[Budmantom]

Intel's fastest chip is $400

 

[Gibson12345]

Everyone seems to forget that Intel has to keep their platform reasonably inexpensive to prevent too many people from switching over to Mac's, whether AMD's around or not.

 

[AtomicDude512]

Originally posted by: Gibson12345
Everyone seems to forget that Intel has to keep their platform reasonably inexpensive to prevent too many people from switching over to Mac's, whether AMD's around or not.

Why does that matter? Macs arn't even compatible with the dirt under your feet! Unless Apple does make the rumored move to x86-64 with a low voltage Athlon 64....

 

[Celeryman]

I agree with atomicdude. Apple is not a threat to the PC market right now. Last figure I looked at, said that Apple holds about 5% of the consumer desktop market. Apples old mainstay, graphic design, is not what it used to be. Dual G4's at 1.25Ghz can't keep up with one Pentium 4 3.06 in photoshop now. Besides that, I really do think people are insane to spend 2,500 to 3,000 on a good graphic design Mac when they could spend half that on a equivalent PC (which you get to upgrade relativily cheap latter on).

 

[dullard]

Wow a lot of misinformation in this thread.

Mjolnir2k: Moore's law (while not directly meant for performance, it does quite well with performace) has held for many, many years. It held before AMD was a threat and nothing changed significantly since AMD has been a threat. If anything, performance increases have slowed down very slightly since AMD became a major player.

AtomicDude: The economy plays a bigger role in Intel's pricing than AMD does. Suppose Intel was a complete monopoly - we still wouldn't pay $3000 for a CPU. Instead we'd just be fine with our current computers. So Intel cannot charge whatever they want. Plot a graph of Intel's prices with the economy - they go hand in hand (this isn't true if you plot Intel's prices with AMD's market share - no simple correlation can be seen). Now about the IPC. Look at my post at the bottom of this IPC thread.. Basically the P3 has slightly better IPC (10-40%) than the P4 in some programs - they are tied in others - and the P4 just blasts the P3 out of the water with the P4s great IPC in the rest (500%+ better IPC).

Jeff7181: There are two things that you can hear about when it comes to business's profits or losses. (1) how did the company do in comparison to expectations. That is what you were talking about. (2) how the company reports its actual profits or losses were. This is what we are talking about. AMD yesterday said they lost $146 million in the last quarter. That means if you add up their revenues, they were $146 million less than their expenses.

SexyK: Intel's top chip prices tend to go with the economy quite well. At the peak of the last boom, Intel's chips ran around $1000. Then the economy slumped and their top chip sales dropped to the $640 level. But that isn't a hard and fast rule. Like Budmantom said, the 3.06 GHz P4 now runs as low as $398.

Gibson12345: Intel does have to compete with AMD and Apple. However AMD has about 3 times the marketshare that Apple does. So if Intel had a big competitor it would be AMD and not Apple.

Everyone: The laws of supply and demand as most people understand them only work well when there is true competition. True competition requires a minimum of about 100 companies - each with 1% or less of the marketshare. We have 3 significant players for the home user - all of them well above the 1% rule. Thus we don't have true competition. This means you need to alter your supply and demand arguments. We are more of a duopoly than true competition.

 

[mjolnir2k]

Originally posted by: dullard
Wow a lot of misinformation in this thread.

Mjolnir2k: Moore's law (while not directly meant for performance, it does quite well with performace) has held for many, many years. It held before AMD was a threat and nothing changed significantly since AMD has been a threat. If anything, performance increases have slowed down very slightly since AMD became a major player.

AtomicDude: The economy plays a bigger role in Intel's pricing than AMD does. Suppose Intel was a complete monopoly - we still wouldn't pay $3000 for a CPU. Instead we'd just be fine with our current computers. So Intel cannot charge whatever they want. Plot a graph of Intel's prices with the economy - they go hand in hand (this isn't true if you plot Intel's prices with AMD's market share - no simple correlation can be seen). Now about the IPC. Look at my post at the bottom of this IPC thread.. Basically the P3 has slightly better IPC (10-40%) than the P4 in some programs - they are tied in others - and the P4 just blasts the P3 out of the water with the P4s great IPC in the rest (500%+ better IPC).

Jeff7181: There are two things that you can hear about when it comes to business's profits or losses. (1) how did the company do in comparison to expectations. That is what you were talking about. (2) how the company reports its actual profits or losses were. This is what we are talking about. AMD yesterday said they lost $146 million in the last quarter. That means if you add up their revenues, they were $146 million less than their expenses.

SexyK: Intel's top chip prices tend to go with the economy quite well. At the peak of the last boom, Intel's chips ran around $1000. Then the economy slumped and their top chip sales dropped to the $640 level. But that isn't a hard and fast rule. Like Budmantom said, the 3.06 GHz P4 now runs as low as $398.

Gibson12345: Intel does have to compete with AMD and Apple. However AMD has about 3 times the marketshare that Apple does. So if Intel had a big competitor it would be AMD and not Apple.

Everyone: The laws of supply and demand as most people understand them only work well when there is true competition. True competition requires a minimum of about 100 companies - each with 1% or less of the marketshare. We have 3 significant players for the home user - all of them well above the 1% rule. Thus we don't have true competition. This means you need to alter your supply and demand arguments. We are more of a duopoly than true competition.

WOW, now that is a complete and thoughtful reply. Thank you for the time it took to write that. Good thoughts all.

I have to disagree with a few points however:

1. Moore's Law (in it's current iteration it's more a comment on a trend) states that data density has doubled approximately every 18 months. However, if you remove all competition from Intel, then they lose the incentive to continue to develop upon this trend as their technology would be the only available. Therefore Moore's law (trend) would become Intel's product release cycle based upon their singular desire to innovate.

2. In a monopoly, pricing indexes are set at what the consumer will bear and not at what the industry will bear. This was the case before the break up of Ma Bell and can currently be seen in the Airline industry. If Intel is the only chip maker, then they will set prices at what the market (consumer) will accept. Currently we have the benefit of some very inexpensive silicon that AMD and INtel sell at a detriment to their margin. Retail costs are ascribed once the company completes a full ROI analysis on their R&D, Fabrication process, production facilities and marketing for an individual product. The flexibility of pricing is when the manufacturer cuts their margins on return.

eg. INTEL produces "Chip A" that costs $20 to produce and market. Intel then charges $30 retail for these chips.

AMD produces a similar product to "Chip A" and has the same costs ($20) per chip but only charges $28 retail. They are cutting their own margin and making less of a profit to buy market share.

Intel then responds (if it chooses to) and reduces the pricing of their "Chip A" to ensure that they do not lose market share to AMD.

This is how even 1 competitor keeps the market in the consumers favor.

Just my .02, but again, thanks for your reply. It's good stuff to ponder!

 

[dullard]

1. Moore's Law (in it's current iteration it's more a comment on a trend) states that data density has doubled approximately every 18 months. However, if you remove all competition from Intel, then they lose the incentive to continue to develop upon this trend as their technology would be the only available. Therefore Moore's law (trend) would become Intel's product release cycle based upon their singular desire to innovate.

My point is that before AMD was competition Intel was on the 18 month schedule. Suddenly AMD became a significant competitor and Intel is on an 18 month schedule. Notice how AMD had no effect? So my point was if AMD suddenly went away, why would that have an effect when AMD hasn't had an effect so far?

2. In a monopoly, pricing indexes are set at what the consumer will bear and not at what the industry will bear. This was the case before the break up of Ma Bell and can currently be seen in the Airline industry. If Intel is the only chip maker, then they will set prices at what the market (consumer) will accept. Currently we have the benefit of some very inexpensive silicon that AMD and INtel sell at a detriment to their margin. Retail costs are ascribed once the company completes a full ROI analysis on their R&D, Fabrication process, production facilities and marketing for an individual product. The flexibility of pricing is when the manufacturer cuts their margins on return.

My point here was that we essentially already have a monopoly. A slightly different monopoly would have negligible effects. Going from true competition to a monopoly has major effects. But not going from 88% marketshare (if you count X-Boxes) to 96% (assuming Apple stays around 4%) isn't going to affect Intel's strategy much at all. Maybe a little, but certainly not much.

 

[FearoftheNight]

good stuff mjolnor

 

[Jeff7181]

One reason Macs aren't competative is because their entry level computer is $1000. And a decent computer to do anything other than basic office apps is around $1500. Not to mention the limited upgrade options.

 

[NeBaWONG]

Well, its also getting to the point where the extra cpu speed is starting to become negligable. Most of us dont do anything with our computers that would require a top of the line 3.06ghz cpu. I think i see a trend of people buying computers and computer parts more for looks rather than performance.

 

[mjolnir2k]

Originally posted by: NeBaWONG
Well, its also getting to the point where the extra cpu speed is starting to become negligable. Most of us dont do anything with our computers that would require a top of the line 3.06ghz cpu. I think i see a trend of people buying computers and computer parts more for looks rather than performance.

I could agree with this. When I switch from my main rig (in sig) to my backup which is a 950mhz cpu & 512 MB of pc 133SDRAM & a Radeon 8500LE I don't see a whole lot of difference in performance. Until I flip on Sim City4 (or similar) and then it's nighty night time for my back up rig b/c it just about chokes to death on the newer games. Also intensive prog's like CAD or Photoshop can wreak havoc with the trusty backup.

But for Word processing and web surfing etc (which is what the majority of what most consumers use these "supercomputers" for)...no difference.

 

[JackBurton]

Everyone seems to forget that Intel has to keep their platform reasonably inexpensive to prevent too many people from switching over to Mac's, whether AMD's around or not.

You're kidding right?

 

[JackBurton]

Well, its also getting to the point where the extra cpu speed is starting to become negligable. Most of us dont do anything with our computers that would require a top of the line 3.06ghz cpu. I think i see a trend of people buying computers and computer parts more for looks rather than performance.

Speak for yourself bro. I could use a 10GHz+ CPU right now! I don't just upgrade just to be cool...well cool in the geek world.

 

[dexvx]

Originally posted by: AtomicDude512
We do need AMD, mainly because if they die, Intel can set CPU prices at whatever they want! That would be bad...

Plus Intel keeps lowering the IPC on their chips which is making them worse for gaming.

You must've been living in a cave the past 2 years. The willamettes had poor IPC due to the structure of the chip and lack of SSE2 enhancements. However, the newer 800FSB HT P4 Northwoods, although not quite the IPC monster, can beat the Willamette, Coppermine, Classic Athlon, and Thunderbird in IPC, if it scaled that high.

Moore's Law (in it's current iteration it's more a comment on a trend) states that data density has doubled approximately every 18 months. However, if you remove all competition from Intel, then they lose the incentive to continue to develop upon this trend as their technology would be the only available. Therefore Moore's law (trend) would become Intel's product release cycle based upon their singular desire to innovate.

In the high tech world, you snooze, you lose. It is that simple. WTF you think Intel employees are going to do during their work? They obviously are not going to be sitting around doing nothing. They are employed to create a new product. Also, with AMD gone, Intel has to worry about the US Justice dept, and believe me, it is not in their interest for AMD to be gone.