AMD raises 5870 price by $10

[ShawnD1]

Then why we got DOLLAR half of price of EURO ?
Because EUROPE doesn't allow ILLEGALS in their country, they are hunting them down, wiseversa in the USA: here we got 50 MILLION ILLEGALS and that's why we have no jobs because that"SMALL BUSINESSES" don't wanna take AMERICAN CITIZEN anymore but bad thing will happen next year when OBAMA will give them CITIZENSHIP, then you gona see how GM and BOEING and anothers will kick out most their workers and replace by them, that's why GM was BAILOUT, to save jobs for NEW CITIZENS and Democrats will have on election +50 MLN votes.
USA became COMMUNIST country.

Your country was communist long before the democrats took power in this past election.
-public roads
-public postal service
-a standing army
-public fire and police services
-medicare and medicaid
-public schools
-NASA

especially since PC games are playing more and more like console games, eg, Modern Warfare 2. Only reason to buy on PC is if you dont have a console. I dont, so I did buy for PC and liked the game but was disappointed in the consolization of it

PCs and game consoles have the same problem of new stuff being a huge rip off. Xbox 360's launch price was almost $500 for the elite one that came with a hard drive and microphone. After waiting a few years, the price is now down to $300. Top end video cards for computers often come out at some stupid price like $500 and quickly drop to $200-300 within a year.

I guess the only thing to stop me from being angry is that getting new PC hardware upgrades the graphics in games I already play whereas buying an Xbox 360 won't make Halo 2 look any better.

 

[Wreckage]

Your country was communist long before the democrats took power in this past election.
-public roads
-public postal service
-a standing army
-public fire and police services
-medicare and medicaid
-public schools
-NASA

Don't forget invading Afghanistan. Oh how I love irony.

Although we have a section for such political discussions.

 

[jvroig]

Let's try putting this thread back on track, we've got a section for politics.

Only by $10 but still...I'm glad I'm not in the market right now...I'll wait until Fermi launches and see what's what:

I share your sentiment. But at the same time, I am glad for AMD. With the limited supply they have, I'm glad they are getting the market surplus right now that they otherwise would have had to make do without if supply was much better and if nVidia had Fermi out on schedule.

Glad I bought my 4890 for $180 a couple weeks after launch.

You are lucky. I wish I got the 4870 or 4890 when they were still lower than the 5770. Right now, they are either gone from the shops here, or are still very pricey (small retailers, old stock).

I actually applaud AMD for doing this. They need the money and we need them to stay afloat.

Agreed. This is a way for them to capture the market surplus that they would otherwise would have lived without milking. And, as you said, they need the money, so I hope this means a better Q4 2009 performance.

It deserves to be mentioned that hiking the price may affect loyalty or brand perception. This is something macro-economics usually doesn't take into consideration when we only talk of supply vs demand, that a company's actions may affect short-term future demand. In my opinion, when the price stabilizes, those whose feelings were hurt when AMD raised prices will gladly buy an AMD card if the value of the card remains better than the competition. In short, I am of the opinion that as bad as it is for me (as a consumer) that AMD raised their prices right now because of limited supply and the fact that those parts are literally flying off the shelves, in the long term it looks like a good decision from AMD. The prices will go down eventually, anyway, and probably sooner than later, and I echo Wreckage's sentiment that AMD needs whatever additional cash they can squeeze from this quarter.

 

[exar333]

Wow I am so glad I got my 5870 when they first came out. I paided $349

LOL, that's about what the 5850 sells for on Newegg now (~$320-330).

 

[Creig]

Personally, I think they should've just stuck with their original MSRP and called it good. They obviously have contracts for the components that go into making the cards, so I don't see how they can claim that their costs are increasing. It's not as if they run down to their neighborhood GDDR supplier every time their assembly line bin runs low and pick up a box of memory off the shelf. Their prices should already be locked in.

 

[nOOky]

Hmmm. If I had a hot selling batch of lemonade, and everybody wanted some, and I could only make so much but sell it as fast as I made it, I sure as heck would crank up the price. Same with anything, whether it's Cabbage Patch Kids or graphics cards it's all the same.

 

[jvroig]

I don't see how they can claim that their costs are increasing. It's not as if they run down to their neighborhood GDDR supplier every time their assembly line bin runs low and pick up a box of memory off the shelf. Their prices should already be locked in.

You are right, of course. But the scenario of limited supply and little competition has created a context wherein more money can be had - that is, market surplus can be grabbed that otherwise would have just been left alone. It bothers good capitalists whenever that happens, so they capture the aforementioned market surplus by hiking prices up.

I am not sure how many people focused on their economics way back when, so to put it simply, "market surplus" can be illustrated as follows:

-AMD sells a product for $300.
-Pricing the product at $300 may result as follows: out of a population of 1,000 possible buyers, 600 would jump on the deal, while 400 will think it is too expensive.
-What happens if we lower the price to $250?
-(again, purely arbitrary for the sake of illustration), perhaps out of the 400 who were previously unwilling to buy, 200 of them will now want to buy the product.
-What happens if, instead of lowering the price, we increase the price to $350?
-(again, purely arbitrary for the sake of illustration), perhaps out of the 600 who were previously willing to buy, 200 of them will now think the product is too expensive. So we only have 400 customers.

That is what we call "market surplus" (at least, the market surplus for the higher pricing bracket). Sure, we could have sold 600 cards if we priced it at $300, but then again, there were 400 people willing to buy it at $350! That's an additional $20,000 we could have had! It makes good capitalists wake up at night drenched in sweat when people willing to part with more money end up keeping their money. By God, if people are willing to part with more money, then capitalists want it!

So here we have AMD's number-crunchers. They see their products fly off the shelves faster than hot donuts during policemen's break time. With people practically fighting over availability of their products, there are a ton of people who would GLADLY pay more just to be able to get it now, instead of waiting for weeks or months because some other guy got the so-desired card. So the good capitalists at AMD said to themselves "Gosh darn it! If people are willing to part with more money, then it's our right - nay, our duty! - as good capitalists and as good stewards for our shareholders to let them give us more money!"

And so here we are, with AMD hiking the price a bit, and the respective retailers hiking it even more (again, the reasoning of the retailers is pretty much identical. They all are also out to capture market surplus).

 

[Creig]

Oh, I can totally understand why they would raise prices. In their place, I would probably do the same. However, I'm just an end consumer and am unhappy to see prices going up instead of down. Their PR statement of component prices going up is just a smokescreen to cover the real reason, namely increased profit margins.

 

[jvroig]

I hear you, and on Christmas, too.

Santa's not leaving me a 5870 under the tree on Christmas day, that's for sure. Unless he builds cards himself in his workshop... nah, AMD doesn't have enough chips to give to retailers who pay cold hard cash, I doubt they'd have any to spare to charity cases like Santa

 

[GrumpyMan]

I'm just glad I have patience. I'll just wait a year from today and get a 5870 for $100.00. By that time maybe some new games that I like will be out too. My 4870 does just fine for now.

 

[Idontcare]

Oh, I can totally understand why they would raise prices. In their place, I would probably do the same. However, I'm just an end consumer and am unhappy to see prices going up instead of down. Their PR statement of component prices going up is just a smokescreen to cover the real reason, namely increased profit margins.

I missed the PR statement, did they really attribute the price increase to component prices increasing?

 

[jvroig]

I missed the PR statement, did they really attribute the price increase to component prices increasing?

Well, from here:

AMD is excusing this rise with some problems that the company is having due to higher component prices, such as the GDDR that the company is using in it's cards , as well as rise in some logistics costs that the company is having, but it seems that the main reason for this step is the lack of competition from NVIDIA, a fact that makes AMD feel very confident about this rise.

That link is linked to by the OP's own link. So what we have here is a forum thread (ours) that refers to another forum thread (linked to by the OP as his source), which in turn links to another forum. Not exactly confidence inspiring, but that's what we have.

 

[Idontcare]

Well, from here:


That link is linked to by the OP's own link. So what we have here is a forum thread (ours) that refers to another forum thread (linked to by the OP as his source), which in turn links to another forum. Not exactly confidence inspiring, but that's what we have.

Ah, I see, ok thanks for the sanity check. So just to confirm we really don't have anything from AMD officially making a statement regarding price? That is not a rhetorical question, I'm really struggling to get straight in my mind what is fact versus speculation these days when it comes to AMD price hikes.

Didn't we have a previous thread discussing price hikes that turned out to not materialize in the market place?

At any rate, here is something that confuses me:

AMD is excusing this rise with some problems that the company is having due to higher component prices, such as the GDDR that the company is using in it's cards

I didn't realize that AMD bought the GDDR that goes into their cards, I thought they sold the GPU to the AIBs and it was the AIBs responsibility to secure their own supply of components necessary for building out the video card which they then market/sell under their own brand label.

I could understand the AIBs coming out and saying we have to hike prices $10 to compensate for higher component prices, but why would AMD be talking about it?

 

[jvroig]

I thought they sold the GPU to the AIBs and it was the AIBs responsibility to secure their own supply of components necessary for building out the video card which they then market/sell under their own brand label.

That's certainly how I understood it as well. The GDDR certainly doesn't come from TSMC's wafer, so no, I don't think AMD sources those themselves.

I could understand the AIBs coming out and saying we have to hike prices $10 to compensate for higher component prices, but why would AMD be talking about it?

Most likely answer? Now that we've gone through the thought process, most likely it's because they didn't talk about it at all. The source/s certainly are far from official.

I never bothered reading the OP's link until you asked about it. And now that we have read it, and thought about it, I'm pretty sure AMD wouldn't cite "component price".

 

[Creig]

I never bothered reading the OP's link until you asked about it. And now that we have read it, and thought about it, I'm pretty sure AMD wouldn't cite "component price".

Good catch. I briefly scanned over the link to see what the OP was referring to and for some reason didn't think to check that XS post for a corroborating link. Sloppiness on my part.

 

[ViRGE]

I'm pretty sure AMD wouldn't cite "component price".

Actually, they've done just that in the past. When the 5850 price hike hit, AnandTech has them specifically citing component costs. AMD is apparently speaking for its vendors.

 

[v8envy]

Their PR statement of component prices going up is just a smokescreen to cover the real reason, namely increased profit margins.

How about this scenario?

AMD's decision makers created a cost model in which R&D and other costs were amortized over N units at various time intervals. The number N was projected from previous yield ramps for similar appearing products.

Then the production kicked off, and yields didn't ramp up nearly as quickly as expected. Which means N is smaller, and the effective unit cost is higher. When the end product is sold out minutes after appearing in stock the choice of eat the increased cost vs. pass it on is rather trivial.

58xx are now sticking around on etailer shelves for longer than a few minutes. You can definitely buy one if you really want one. Which means demand and supply are reaching equilibrium at current prices. Won't be too long until those prices start declining.

 

[jvroig]

AMD is apparently speaking for its vendors.

Weird that AMD would do that, but the AT article does clearly state that AMD did cite component cost. I don't know why they would speak for their vendors. Perhaps they are just taking care of their AIBs by trying to assuage the consumers by explaining the reason for the increase in price, so that consumers won't naturally assume AIBs are just being greedy? Even so, can't say it's working splendidly. Everybody probably still assumes it's really just a matter of supply vs demand.

 

[Voo]

Want to try again, in English?

Better yet, educate yourself.

http://www.therochesterdemocrat.com/index.php/print/strong_dollar_inflated_euro/

You know that the official inflation target of the EZB is 2% while the one of the FED is 3.5% (note that doesn't have anything to do with the actual inflation notes, that's just the target they have in their statues)?
Also note that even according to US government statistics the US has a way higher inflation than the EU-15 and even a bit higher than the EU-27 for 2007/8 and preceding years.


Neither the US nor the EU has saved money in the last time, so the numbers won't look any good for either in the next years.


Well b2t: Supply and Demand as well as a de facto monopoly on high end gpus.. The prices will be high, at least till Nvidia gets Fermi on the market - not much we can do about it.

 

[KIAman]

Ahh, crap, now it's out of my price range

 

[manimal]

Its actually commendable they launched at the price it was at. The real lack of supply is the issue since even at the horribly inflated prices since launch the initial price could have been $449-499 the 5870 would have sold out.

 

[Idontcare]

Actually, they've done just that in the past. When the 5850 price hike hit, AnandTech has them specifically citing component costs. AMD is apparently speaking for its vendors.

Hmmm, what I got out of that one comment (which was not a quote by an AMD rep btw) was that AMD was attempting to deflect some of the blame of the cost increases away from themselves in the manner of saying "look we ain't the only ones where raising prices on the AIBs, so don't go haten on us because your 5850's are higher in price, there's other guys you can blame too, like memory, yeah yeah those bastards too, they be raising prices all the time too ya know".

 

[Ryan Smith]

Hmmm, what I got out of that one comment (which was not a quote by an AMD rep btw) was that AMD was attempting to deflect some of the blame of the cost increases away from themselves in the manner of saying "look we ain't the only ones where raising prices on the AIBs, so don't go haten on us because your 5850's are higher in price, there's other guys you can blame too, like memory, yeah yeah those bastards too, they be raising prices all the time too ya know".

Hey all, your friendly neighborhood AT GPU editor here.

I noticed the discussion, and in fact I do have a quote from AMD on the matter, which is what lead to the linked to blog post.

Due to the accelerated ramp of the ATI Radeon(tm) HD 5800 series products to meet overwhelming demand at a time when a recovering computer industry is limiting supply on some parts, AMD is incurring higher component, memory and logistics costs.

The whole industry is seeing greater than expected demand; AMD is trying to pin some of the blame for higher prices on supply problems with components (and not just a lack of Cypress GPUs) but really it's all academic. There simply isn't a large enough supply of high-end GPUs for the rest of the year, so prices are going to go up to capitalize on this.

 

[Idontcare]

Thx Ryan for posting the quote and your assessment of what to take away from it.

Do you know if AMD offers "barebones" GPU+memory+other components to AIBs such that elevated GDDR prices would actually result in AMD elevating their prices?

I'm still baffled how/why AMD was compelled to discuss their AIBs cost structure regarding memory and other components as if it were up to AMD as to what the AIBs pay for those parts.

The "logistics costs" I get, they are still air-freighting these chips from Taiwan to the AIB's assembly factories versus using standard shipping. The other part confuses me though.

 

[Painman]

I certainly don't know for sure, but I don't believe, that AIBs are doing any board manufacturing for the 58xx series at this time.

Economy of scale doesn't make it sensible. It's cheaper for one factory to purchase a million RAM chips and have it all shipped to said factory, than for 10 factories to order 100,000 each and have them shipped to 10 different facilities around China. Same goes for PCBs, capacitors, all the components.

My MSI 5850 has the AMD corp. logo silkscreened onto its PCB. So does every 58xx card I've seen pictured across the web. I strongly believe that reference design parts are all coming from one place fully dressed with components, and AIBs are receiving these finished cards, then dressing and installing the coolers at their own facilities. Every AIB has their own junk that they plaster onto the coolers, and some are offering their own cooling solutions. But every PCB I've seen has the AMD logo, and at the very least, the same brand and style of chokes on them.