Intel guilty in EU for manipulating the market against AMD?

[[XC] riptide]

Its great to see justice done in some parts of the world anyways.

[Donnie27]

Its called price elasticity. Change up the price 10%, loose 15% in monetary sales. Fail.

So that's why AMD didn't gain market share when they jacked up prices on the Excellent X2? See, I think some of you guys are trying to have have you cake and eat your cake too, it doesn't work!

Plus, you don't loose sales when your competition raises their prices a smilar amount as well. AMD doesn't need more volume as much as they need higher ASP's. AMD can't create the extra volume to keep price the same and turn a profit worth talking about. Folks thinking killing rebates and Intel paying some large fine/s will lower prices are fooling themselves. This whole case is to get prices higher, NOT lower. Here's the shocker, even as I post this. I hope I'm as wrong as two right shoes

[[XC] riptide]

So that's why AMD didn't gain market share when they jacked up prices on the Excellent X2? See, I think some of you guys are trying to have have you cake and eat your cake too, it doesn't work!

Plus, you don't loose sales when your competition raises their prices a smilar amount as well. AMD doesn't need more volume as much as they need higher ASP's. AMD can't create the extra volume to keep price the same and turn a profit worth talking about. Folks thinking killing rebates and Intel paying some large fine/s will lower prices are fooling themselves. This whole case is to get prices higher, NOT lower. Here's the shocker, even as I post this. I hope I'm as wrong as two right shoes

AMD's offererings are fairly attractive at a certain price point nowadays. That means if/when Intel raises prices, many will flock to AMD.

What I think will happen as anti competitive rebates are discouraged in the EU and Asia, and AMD gain more market share, if and when they narrow their node-lag time with Intel, Intel will have to price more competitively. They'll make up for that loss, in the US by charging higher prices.

[Easybeat]

If fining Intel makes them increase their prices in the short term to OEM's then yes the consumer will lose out slightly but we will lose out one hell of a lot more if Intel's practices drive AMD out of business.

[Donnie27]

actually, i work for a multi-billion dollar multi-national buerocracy, so i do understand international business on a large scale. and if intel is SO opposed to taking losses, why didn't they incease thier prices to cover the 90% profit loss they took in Q4?

http://albany.bizjournals.com/albany...2/daily72.html

so businesses today are run the same way they were in 1800? there is NO-ONE in the world willing to look at thier business model and make some adjustments? there is no business evolution? please, tell this to toyota and come on back with their response.

my milk and grains? where!?! i've been looking all over for those! actually processors, memory, toasters, televisions; these are considered commodities.

AH-HA!!! so the conspiracy has been revealed! this is all a plot to undo intel and raise amd to their rightful place as market leader! very clever of you to figure it out.

so now amd would not raise prices because intel will? which is it?

when did the q6600 price go up? also, i7 and x58 parts will not see a price reduction for some time (when volume starts to pick up). and i think this is the part you don't understand: prices are lowered on products that sell very well. the more of a certian product you sell, the less it costs you to make it. the concept is called "eceonomies of scale." and that is why intel WILL NOT raise prices because of the fine. if they raise prices (aside form bolstering amd's sales) they will reduce their sales making it more expensive to make the products. then they'd have to raise prices again. then even fewer people would buy their products.... and so the cycle of self-destruction goes. intel is aware of this process and will make business adjustments to avoid it. if this fine results in anything at intel, it will be layoffs. because profit = cost - price.

Just for the record, we only have about 6200 employees. Business isn't ran the way it was in the 1800 or there might have been a duel involved LOL! Thank you for the at least civil post. But your shot at comedy falls a little flat. I said, "Give AMD a hand up" and or "Help them", NOT take over the market LOL! That's the real leveling affect they talked about. It doesn't matter if Processor or any electronic are commodities or not! Cost in just about every market are passed on the customers=P Hell google it and get a few million hits!

We're in a world wide recession last time I checked, fewer people will be buying this stuff anyway!

[Donnie27]

AMD's offererings are fairly attractive at a certain price point nowadays. That means if/when Intel raises prices, many will flock to AMD.

What I think will happen as anti competitive rebates are discouraged in the EU and Asia, and AMD gain more market share, if and when they narrow their node-lag time with Intel, Intel will have to price more competitively. They'll make up for that loss, in the US by charging higher prices.

That's crux of my argument. If you think AMD's prices will stay where they are, you're fooling yourself. The whole schlock is to raise prices.

[[XC] riptide]

^^^ Let me get this straight Donnie. And just for a moment can you leave your Anti-Europe sentiments at the door.

So you reckon that its a sort of a ploy with colusion to get both MANU's to raise their prices?

[Chad Boga]

This whole case is to get prices higher, NOT lower.

Whilst that will most likely happen, surely you aren't stating that higher prices in isolation was the motivating factor in the EU decision?

AMD's offererings are fairly attractive at a certain price point nowadays. That means if/when Intel raises prices, many will flock to AMD.

What I think will happen as anti competitive rebates are discouraged in the EU and Asia, and AMD gain more market share, if and when they narrow their node-lag time with Intel, Intel will have to price more competitively. They'll make up for that loss, in the US by charging higher prices.

Why won't consumers in the USA flock to AMD if prices are raised in the USA by Intel?

[B.E.E.F.]

That's crux of my argument. If you think AMD's prices will stay where they are, you're fooling yourself. The whole schlock is to raise prices.

The whole schlock is to increase market share. Because profit = (price x units sold) - total costs.

Here's how pricing works:




Revenue = Price * Units

Please post something else but pages of useless drivel. Thanks.

[[XC] riptide]

Why won't consumers in the USA flock to AMD if prices are raised in the USA by Intel?

Are anti-competitive "rebates" still practiced by Intel in the US?

[Chad Boga]

The whole schlock is to increase market share. Because profit = (price x units sold) - total costs.

More units sold = more money.

Is every CPU AMD sells actually making a profit at current pricing? Why are they losing money qtr after qtr?

With some of the Duals and Tri-Cores they are selling they are likely to have to be using perfectly functioning Quads which due to the die size, is a damn expensive way to maintain presence in certain price segments until you hopefully eventually get your proper Dual Core and/or Tri Core masks rolling off the assembly line.

AMD would love to be able to raise the price of their CPU's, their current low ASP's are killing them, and I doubt an increase in volume(and keep in mind here they will only be able to increase that volume to certain extent due to not all segments of the market are that price sensitive beyond current pricing), would work as well as an increase in price.

Having said that, they most likely would benefit from increased volume compared to no increase, just not as much as they would benefit from being able to raise prices, IMHO.

[Chad Boga]

Are anti-competitive "rebates" still practiced by Intel in the US?

I don't know, but as the US allows for such rebates, then technically they are not "anti-competitive".

Regardless, even if they are in place, Intel has already priced their CPU's in the USA to take that into account, thus already derive whatever benefit they bring, to then increase prices as you suggest they might, then surely invokes the argument you used for why they can't raise prices in the EU.

[B.E.E.F.]

Is every CPU AMD sells actually making a profit at current pricing? Why are they losing money qtr after qtr?

Selling below cost. They're taking a hit off each CPU. It's much less than if they stopped selling CPU's all together.

The fixed costs are killing them. If they increase market share, they should be able to turn a profit.

[[XC] riptide]

I don't know, but as the US allows for such rebates, then technically they are not "anti-competitive".

Regardless, even if they are in place, Intel has already priced their CPU's in the USA to take that into account, thus already derive whatever benefit they bring, to then increase prices as you suggest they might, then surely invokes the argument you used for why they can't raise prices in the EU.

No. Because if Anti-Competitive rebates and other practises are, as you say, allowabale in the US, that means you have less to worry about losing market share..... <<< The reason one engages in anti-competitive rebating in the 1st place.

[Chad Boga]

Selling below cost. They're taking a hit off each CPU. It's much less than if they stopped selling CPU's all together.

The fixed costs are killing them. If they increase market share, they should be able to turn a profit.

I don't rule out the possibility of increased volume alone being enough to enable them to turn a profit(but how much more volume at current pricing do they need and is it realistic to expect that they could achieve it?), but I suspect a small price increase if they felt they could get away with it would be more effective.

I hope they can survive until Bulldozer and that it either puts them back in the lead performance wise or at least makes things very close and gives them the sort of modular architecture where they can easily roll off Duals, Tri's, Quad's, Hex's etc, without having to use cost ineffective higher core dies for the low die market.

[Chad Boga]

No. Because if Anti-Competitive rebates and other practises are, as you say, allowabale in the US, that means you have less to worry about losing market share..... <<< The reason one engages in anti-competitive rebating in the 1st place.

If the worry over loss of market share is lessened as you say, wouldn't Intel then already being currently pricing their CPU's at just below "breaking point", so that they maximise their profits?

I would suggest that to then try a further increase would change the dynamics beyond what the rebates can achieve.

[B.E.E.F.]

(but how much more volume at current pricing do they need and is it realistic to expect that they could achieve it?)

Good question. A look at the internal financial reports is your answer.

a small price increase if they felt they could get away with it would be more effective

If there's enough demand. There isn't. Higher demand, you can increase price. ie: Apple computers. Expensive sh*t boxes, but people love them so they price them high.

[Chad Boga]

If there's enough demand. There isn't. Higher demand, you can increase price.

If Intel increases their prices as some suggest, then doesn't AMD get the chance to raise their prices to some extent and at least maintain existing demand?

[[XC] riptide]

If the worry over loss of market share is lessened as you say, wouldn't Intel then already being currently pricing their CPU's at just below "breaking point", so that they maximise their profits?

I would suggest that to then try a further increase would change the dynamics beyond what the rebates can achieve.

Remember what these anti-competive rebates are about. They mean that if you do not sell only Intel the rebates are removed thereby making your Intel products costs hugely inflated. Inflated to such a degree that you go out of business. So going out of business versus another 10% of costs/price increase?

Further to your earlier point.... a companies profit structure can be composed of several things other than just Fixed, and Variable costs. A good Marketing and FInance team will very easily come up with stress tested pricing srtategy that can allow short term drops = long term market share.

It can be a tradeoff for example.... make 3% more profit this year... but risk loosing market share by 1% each year for the next 3 years by not enforcing anti-competitive rebates. Sure profits will be better now... but in 5 years and beyond, market share might be hurt. You get the idea.

[Chad Boga]

Remember what these anti-competive rebates are about. They mean that if you do not sell only Intel the rebates are removed thereby making your Intel products costs hugely inflated. Inflated to such a degree that you go out of business. So going out of business versus another 10% of costs/price increase?

Further to your earlier point.... a companies profit structure can be composed of several things other than just Fixed, and Variable costs. A good Marketing and FInance team will very easily come up with stress tested pricing srtategy that can allow short term drops = long term market share.

It can be a tradeoff for example.... make 3% more profit this year... but risk loosing market share by 1% each year for the next 3 years by not enforcing anti-competitive rebates. Sure profits will be better now... but in 5 years and beyond, market share might be hurt. You get the idea.

That is a good post, whilst there might be a few things I could say that draws into question an assumption or two you have made, I think on the balance of probabilities you have defeated most of my arguments.

[B.E.E.F.]

If Intel increases their prices as some suggest, then doesn't AMD get the chance to raise their prices to some extent and at least maintain existing demand?

I could see Intel increasing prices on the Atom, and maybe other notebook CPUs. The Turion doesn't have much market penetration, and where in the hell is Via?

Desktop CPUs, I doubt it.

[nullface]

I do think its totally correct to use "EU land". Land doesnt automatically mean "island". Or "country" or stuff like that. EU land would mean just a piece of land (opposite to sea/ocean?) that territorially belongs to the EU :p. Dunno, sounds fine to me

LOL!

And now im proud to be Danish!

[duploxxx]

Is every CPU AMD sells actually making a profit at current pricing? Why are they losing money qtr after qtr?

With some of the Duals and Tri-Cores they are selling they are likely to have to be using perfectly functioning Quads which due to the die size, is a damn expensive way to maintain presence in certain price segments until you hopefully eventually get your proper Dual Core and/or Tri Core masks rolling off the assembly line.

even with dual, tri and quad prices they are still making money, just looking at the bare costs.

its all other sg&a and r&d cost that bring the global profit/loss. if the volume would be much higher the cost would reduce allot. if you can't raise volume you have to restructure in sg&a and r&d.

look at intel's latest result, still profit but way lower then usual, most because of pricedrop? no way. Just because of huge volume drop but global costs stay the same. If the market would shrink again like it did in last Q, even intel would start loosing money unless they stop some fabs.

that's why the say it is gearing up again if you see enough times it is getting better people will actually start to believe it.

[cegras]

When all is said and done, it is commie style legislated competition and it will increase to help AMD, just as it was when it first showed up in 2000, almost nine years ago.

At least it didn't land the whole world into recession, amirite?

[BababooeyHTJ]

I don't understand the "point" that people have been trying to make saying that AMD would follow Intel in raising their prices if Intel did so. What do you think AMD wants their market share to stay the same? If AMD was in a different position I would say that they probably would raise their prices as well but that just isn't the case.