How low will AMD go?

[BD231]

With Intel's up-coming price cut's, how low do you think AMD will go this time?. I remember the last price cut on the T-Bird being quite large, will we see the same thing with XP CPU's? I was also wondering how likely it would be to see the price cut's effect T-Bred CPU prices as well, will the price cut's only effect their .18m processors, or will it be an "Across The Board" type price cut. I'm not sure if there is really any way to know for sure but I would like to hear some Ideas.

 

[John]

AMD is practically giving the cpu's away right now. I think the only noticable cuts will come from the XP2000 & 2100.

 

[johndoe52]

<< I think the only noticable cuts will come from the XP2000 & 2100. >>



Pretty much. Everything else is priced so close to each other there's not much room to drasticly cut prices.

 

[tboo]

When is AMDs next cut? Im looking to buy right now.

 

[MadRat]

They will not cut so much down on price as much as they'll eliminate dead product lines. Look for XP1800+ as entry-level for the Athlon and Duron cut back to 1200-1300MHz speed grades only.

 

[BD231]

AMD is practically giving the cpu's away right now. I think the only noticable cuts will come from the XP2000 & 2100.

I was thinking this as well but I keep hearing "Intel is cutting prices and AMD is sure to follow".

 

[AGodspeed]

AMD cut prices weeks ago, they just haven't made it official yet.

The AXP 2100+ is currently selling for $227 online, yet it's "official" price is $410 in 1000 unit quantities. AMD has already cut prices for boxed CPU's and such, it's just not "official."

Therefore, you'll probably see AMD announce that they are cutting prices the week Intel cuts their prices, when in reality AMD's prices have been cut for weeks now...

 

[Vrangel]

<< AMD is practically giving the cpu's away right now >>



Its quite opposite in fact. ASP (average selling price per chip) used to be $40 for AMD and $200+ for Intel
couple of years ago. Now its $90 for AMD and $150 for Intel. Athlon is the money maker , AMD losses come from
flash memory where prices completely collapsed.

Intel on the other hand is suffering from its XBox victory. If you remember they won contract at the last minute
by giving Microsoft a deal they couldnt refuse. Turns out its $30 for XBox cpu .
Talking about giving stuff away, hehe.

 

[hans007]

their ASP is far lower than $90 to big box manufacturers. Their published prices are all fake to make stock holders feel better. thats why pricewatch prices are so much cheaper because that is from gray market, which is what say a compaq or something would get it for , and then sell it off to stores. plus there is a markup. a company like hp or compaq which is basically all that amd has left on their side as no other big box manufacturer currently uses AMD as a CPU supplier which really is sad as that will become one company then they will only have one company on their side and should be getting huge discounts. As far as i know, micron , gateway , and sony have dropped them. toshiba doesnt use them in notebooks, dell doesnt obviously. smaller companies like fujitsu use them but thats about it. a lot of it might be the way that intel pays for part of your advertisiing if you use them exclusively.

anyways compaq and hp are probably paying like ~$150 to 170 for an xp2100 (maybe even the 2200 which they probably already have , for pre release build up) and probably like $40 or something for a duron 1.2.

 

[MadRat]

hans007-

What you just proposed there is outright fraud. Its not likely to be happening because AMD is likely not going to risk SEC criminal investigations just to survive in the CPU business.

 

[hans007]

well its known in the industry that they publish their 10000 lots quantities much higher. the buy price for a large oem such as an HP or a compaq is usually much lower. Sometimes this is covered for with rebates.


I.E. compaq or something will buy 10000 athlon xp 2100s lets say for the published price. say the price is like $250 a piece. so they buy them and put down their 2.5 million. AMD will give them a rebate or something like that to give them the discount, so like say in a few months they credit them back for like $60 a pop. I suppose that works for the SEC, because they do do it.


This is something AMD has to do to survive, their published prices are waaay to high for anyone big box company to want to buy their chips . Besides they can always have a special deal with a company, and the price they publish online for 10000 units could just be for distributors. that doesnt even make sense either.

i mean really if their 10000 unit price for a xp2100 is like $400 and it sells at newegg for lke 250 , obviously they are selling it for much less to some other entitiy who is selling it to newegg. even their retail box units are cheaper than the published price.

so really , what the published prices do is make the investors feel better, because those people arent gonna investigate what the going rate is . if they actually sold at the prices they put out in the press releases, NO COMPANY would use AMD, as there would not be nearly enough incentive. they would have gone out of business years ago.

 

[Vrangel]

hans007
Companies like AMD and Intel release their ASP in quarterly reports
along with overall earnings and revenues and number of chips they shipped.
Fake numbers would have been easily discovered using simple math.
You know, multiply number of chips by ASP and you get revenue.

You can even do it yourself just in case.

 

[hans007]

yeah, but you cant discover the exact amount they are charging for say a xp2100 by calculating a quarterly earnings report. i was talking about the published prices which arent even the right prices when a cpu is firest introduced. there is no way in hell that actual amount is what they quote on their published 10000 unit price sheets. thats the real issue . yes i know all you amd fan boys out there, dont wanna hear that. but their ASPs i believe are still around $90. supposedly they needed $100 per chip to break even a few years back, dont know what it is now.

 

[AGodspeed]

a company like hp or compaq which is basically all that amd has left on their side as no other big box manufacturer currently uses AMD as a CPU supplier which really is sad as that will become one company then they will only have one company on their side and should be getting huge discounts. As far as i know, micron , gateway , and sony have dropped them. toshiba doesnt use them in notebooks, dell doesnt obviously. smaller companies like fujitsu use them but thats about it. a lot of it might be the way that intel pays for part of your advertisiing if you use them exclusively.

MicronPC, Sony, and Fujitsu definitely still sell AMD based systems. Have you gone to their web sites recently?

Gateway did dropp AMD (6 months ago), but knowing how little Gateway actually marketed their AMD systems back then and knowing how bad Gateway was doing then (and now), it wasn't that big of a deal. IBM also dropped AMD, but that was most definitely not a big deal, considering the only AMD based systems sold at all in North America from IBM were build to order systems, which back then were impossible to find on IBM's web site unless you specifically used their search engine.

AMD has lots of OEM's, including Compaq, HP, MicronPC, Sony, Fujitsu, AlienPC, and many others. The one big OEM they're really missing is Dell. This is mostly because they simply can't supply Dell with enough CPU's at this point in time, although this will surely change within the next year. AMD's foundry deal with the UMC to produce .13-micron processors will increase capacity (not to mention UMC would gladly produce a crapload of processors since UMC is barely at 60% total fab utilization). In addition, some of those UMC-produced .13-micron AMD CPU's will reportedly be using 300mm wafers, which equals a lot more processors compared to 200mm wafers if the yields are the same.

In addition, production will naturally skyrocket in AMD's only processor fab (Fab 30 in Dresden Germany) once they've fully converted to the .13-micron process.

 

[hans007]

hmm i guess i was wrong about micronpc. sony sells 2 notebooks. thats not really significant. butwhatever, i'm just saying, they have lost some of the companies they used to have, like gateway and ibm which doesnt even sell aptivas (no amd in the netvista) anymore back to intel.

 

[BD231]

The one big OEM they're really missing is Dell. This is mostly because they simply can't supply Dell with enough CPU's at this point in time, although this will surely change within the next year

Thats understandable, but the key word in there is "mostly", I'm wondering what the other key factors are. Is Intel offering some type of awsome deal on their processors to Dell? I know Intel has been pushy in the past, what are the chances Intel will start pushing Dell around if Dell starts using AMD chips?

 

[MadRat]

I suspect that Dell has major discounting by Intel in order to make the latter #1 seller with the #1 OEM maker. Simply having a good product is not enough in this day and age of miniscule markups to gain such a huge market lead. Dell's sales have simply exploded in comparison to other OEM products, and its never been about a better product. Perhaps it was the rumour that Dell had great service... *chuckle*

 

[BD231]

I suspect that Dell has major discounting by Intel in order to make the latter #1 seller with the #1 OEM maker. Simply having a good product is not enough in this day and age of miniscule markups to gain such a huge market lead. Dell's sales have simply exploded in comparison to other OEM products, and its never been about a better product. Perhaps it was the rumour that Dell had great service... *chuckle*

I think the "great service" rumour took Dell a LONG way. Intel must be cutting them some seriously awsome deals, they have been selling computers DIRT cheap it would seem. I cant really say wether or not their service is good though, I've never delt with them, however I know a great deal of people who have and they have never had any gripe's. But people on the fourms say their service sucks, it's hard to tell who's telling the truth. I guess the "Dude, you're getting a Dell" PR must be working really well

 

[hans007]

The rumor dell has great service. You guys wanna know how that came about. Go buy a computer magazine. Those used to get read a lot, you know that paper kind.

Flip the magazine over, see that ad on the back. See the gateway ad in the middle. You wonder why dell micron and gateway were touted as being so great before. EASY . Ads. You pay the magazine company a ton for ads, you get great reviews. Dell micron gateway. used to always be top 3 in every pcworld or pcmag roundup. Dell always got an A in PC MAG's service and reliablility roundup.

I don tknow, there is a lot more shadyness going on in the industry. The OEM my dad works for used to sell systems under their own name in the 80s and early 90s. he used to tell me how the PC mag reviewers would call them and say somehting like ... "well we really like your system, but we'd really like it more if you guys sent us a couple extra to keep" . Needless to say they stopped sending systems. I've even heard stories about like... "escorts" being bought for the press, or escorts for key suppliers under negotiation. etc. I mean its a big money industry , this should be expected after all.

 

[junthin]

I'd have to agree with what hans007 has been saying. The PC industry for the big companies is a tad "shady". And about those magazine reviews, a lot of them used to (or still do) get paid off well to print out good reviews of certain items.

Anyways...

speaking AMD going low...

They will probably cut the slower chips totally out of production and make new standard in "value" pc, so in the public's eye, "Your Home computer is too slow! Upgrade!".

 

[BD231]

The rumor dell has great service. You guys wanna know how that came about. Go buy a computer magazine. Those used to get read a lot, you know that paper kind.

Flip the magazine over, see that ad on the back. See the gateway ad in the middle. You wonder why dell micron and gateway were touted as being so great before. EASY . Ads. You pay the magazine company a ton for ads, you get great reviews. Dell micron gateway. used to always be top 3 in every pcworld or pcmag roundup. Dell always got an A in PC MAG's service and reliablility roundup.

I don tknow, there is a lot more shadyness going on in the industry. The OEM my dad works for used to sell systems under their own name in the 80s and early 90s. he used to tell me how the PC mag reviewers would call them and say somehting like ... "well we really like your system, but we'd really like it more if you guys sent us a couple extra to keep" . Needless to say they stopped sending systems. I've even heard stories about like... "escorts" being bought for the press, or escorts for key suppliers under negotiation. etc. I mean its a big money industry , this should be expected after all.

It's a little hard to think that add's alone would push such a large sales surge, but seeing as how Dell and the like are trying to appeal to people who don't know to much about computers, it gets pretty simple. Most people walking into a computer store usualy take 3 things into consideration. 1.)Warranty, 2.)Price, 3.)MHZ. Those 3 factors happen to be the key items that companys seem to be pushing in their add's. Any commoner who see's a 1ghz + machine for under a $1,000 bucks is sure to think its a great deal, and more power than they'll ever need.

 

[BuckleDownBen]

bdog-

i think one of the most important things for the average computer buyer is reputation. this can be word of mouth, but its more likely to be going to the Bookstore and flipping through PCMagazine, where they have ratings for each PC maker. I know that is what my dad would do when he buys his computers every four years. He had a Gateway, then he got a Dell, and he thinks Gateway had much better customer service (shorter hold times, better reps, less bs), but he thinks the build quality of the Dell is a lot better. Dell does know how to put together a quiet pc.

 

[Vrangel]

hans007

AMD just released its earnings report.
It sold 8 million cpu in a quarter for a total $684M.
Thats $85.50 each .

 

[hans007]

yeah i saw . 85.50 each. thats below break even , and thats their 3rd quarter in a row of losses. they did sell more than ever. so well.. that probably means that they are basically giving the chips away. most of the big box places dont use them on high end, and usually only buy midrange from them, so well, they probably dont sell a ton of xp2100s, but probably a lot of 1800 and 1900s at around that $85-100 range. anyways... they are gonna have to start selling for more, or else they are gonna run out of cash. They need better advertisting soon, its almost non existant and i believe that more than anything will get their ASPs up . Continued architectural improvements are not what they need, they need to follow intel and produce a CPU that has higher mhz and is more advertisable, i dont think normal people will ever really believe mhz doesnt matter or that AMD is as good as intel until they advertise a lot.

 

[BD231]

hans007-

As far as advertising goes your right, I hardly EVER see an AMD add, but I always see a little green Intel P4 alien's everywhere. I think AMD will change its stratigies with the Hammer, if all the specs are true then it should really wipe the floor with the P4. Hopefully AMD can keep the performance crown away from Intel long enough to actualy grab some day-to-day conosumer support this time. Once AMD has a truely award winning processor that dominates in all area's including low heat dissapation, low voltage's and overall performance and stability, they'll be able to charge what they deserve.