Being competitive is not enough.
Quote:
Originally Posted by
AbelJemka
I don't think you got the point too. Either T_Flight don't have it.
You speak about competition like in old days, AMD speaks about competitiveness.
Highest performance is not necessarily the key to sucess. Just look at Nvidia-ATI. Nvidia have the performance crown but which company sell the most :rolleyes:
2008 Nvidia margins were ridiculous. That's wh they badly needed 55nm. They earned pityful money with 260 and a little more with 280 GTX
.
I was talking about T flight point. Which just simply talks about margins. I think everyone knows AMD cannot overcharge for the price of the Phenom II because it simply won't sell, especially with the AMD name. I think what he was getting at is AMD needs to release a better product than Intel because competitive is not enough. Remember when people bought celeron over AMD because it had the Intel name?
A product that cannot simply be countered with price cuts(i.e what core 2 initially had) and thus have high profitable margins. This means products in the Intels lineup cannot compete with AMDs with a simple shift in price. I agree the most money right now is between 100-300 dollars considering the economy, but this is obvious. AMD does not need to compete with core i7, but it would not hurt. Forget what I have just said.
AMD needs to release a product with core i7 like or better performance and charge C2Q prices. That's what it will take to beat Intel. This might seem irrational and impossible, but that what Athlon X2 initially offered and this is when AMD was at it strongest, nonetheless just matching intels marketshare.
Say AMD is making 40-50 percent margins(which is a stretch since anand even says the margins on these chips are not fantastic(someone above posted margins) on phenom II, with this pricecut, AMD gross margins have dropped 20 percent, leaving them with a paltry 20-30 percent. Add in the other cost not included in gross margins, debt on interest and they are still not making any money.
Quote:
Originally Posted by
highoctane
You might as well say Toyota won't be successful as Chevy since they don't have a Corvette or that Hyundai and Kia can't compete successfully with their lower prices and smaller margins as the other automakers with flashier faster more powerful models.....default.
You cannot compare the car market to the processor one. I.e Car reliability > processor reliability, fuel consumption > energy use. Car performance is also too difficult to compare to Processor performance.
Heck the graphic sector is different enough that you can't use them as comparisons simply because Intels marketing name is better than AMDs, where name in graphic card does not play that much of a role to the consumer(not fanboy).
As I have mentioned before, AMD needs to diversify with new tech that will trickle down to lower segments. This will involve releasing product at higher price points and reducing its line up to reduce redundancy and also cutting down on AMD own products competing with itself.
AMD has more than 20 processors available for the consumer segment. Yet the highest priced chip is 225 dollars. From my perspective, AMD killed half of its line with the release of phenom II, its too closely priced with the rest of its line. However if phenom II had better performance and thus justified perhaps 499 and 350 and 250 dollar price point. AMD gross margins would more than double and AMD would not need to give their lower end chips away to sell them.
Sure the best selling chip might be the 250 dollar one. But as time goes on, the 350 dollar chip would become the 250 dollar chip and larger price gaps gives the product a longer shelf life as well as create incentive to buy when price cuts do occur. The 250 dollar chip could go down to 180 allowing more mainstream people to adopt. It might be bad for the consumer, but it allows AMD to milk the high profit margins ship as long as possible. It also gives AMD enough time to improve yields to the point where costs have lowered that such a price point is still profitable.
You might say why is core i7 not flying off the shelves. Easy answer, the price of the MB and RAM, which is a cost consumer consumer are less willing to splurge on, makes the entry price of core i7 too high.
