AMD winning the price war
A few days ago, at www.newegg.com, Intel occupied three of the top selling CPU spots, they were Pentium D 930, Pentium D 805 and some Pentium 4 chip. After AMD's price cut, the only Intel CPU in the top five is a Pentium 4 524.
- AMD Athlon 64 3400+ 1600MHz HT Socket 754 Processor - OEM $99.00
- AMD Athlon 64 X2 3800+ 2000MHz HT Socket 939 Dual Core Processor - Retail $159.00
- AMD Athlon 64 X2 4200+ 2000MHz HT Socket 939 Dual Core Processor - Retail $199.00
- AMD Athlon 64 X2 4200+ 2000MHz HT Socket AM2 Dual Core Processor - Retail $195.00
- Intel Pentium 4 524 533MHz FSB LGA 775 Processor - Retail $81.00
posted by Sharikou, Ph. D. @ 7/28/2006 01:39:00 PM
34 Comments:
The EE965 does not only eat the X2 3800 but also all the other top-5 CPUs.
Moron
Is there any mention of how many processors this represents and over what time period?
Is this Top 5 for the day, last hour, last 5 minutes?
Does Top 5 represent 5 unit sales, 50 unit sales, 500 unit sales?
And come on Sharikou, haven't enough people posted by now on how innacurate your "3800 frags 965 comment" is with supporting data, for you to understand this is only true inside your head? I notice you no longer even link your so called proof as it doesn't support your argument.
You sure do like to say "frags" a lot.
What's funny is when you come back exactly 1 week and look at that list it's going to be completely different. Nobody who buys CPUs off newegg will want an AMD chip because Conroe will be in full swing.
but he's right 965 is pretty expensive and is pretty much even to the X2 3800+ in most benchs, Pentium D sucks always has and always will. you intel Fanbois should realize this now that you got the Core 2 Duo to "guide" you
http://www.overclockers.com/tips00996/
Please read this and comment anyone
Sharikou in particulare
Conroe availability is limited right now so I don't think it will make the top 5 next week. If AMD can get their 4X4 out quick enough they will keep the retail sales lead.
"The EE965 does not only eat the X2 3800 but also all the other top-5 CPUs."
That shows a lot your love to Intel. If that EE965 is so great, why on earth Intel needs Conroe? From the benchmarks I seem, X2 3800 is quite equal to EE965. I wouldn't say frag, but the performance is at the same level.
It makes me laugh to think all the fanbois in the AMD man-fanboy love association are staking their hopes on Intel not being able to make enough of their world-beating Conroe/Merom/Woodcrest chips.
Meanwhile, AMD cuts prices of their old chips. Just like Intel already did.
And isn't it ironic that the AMD fanbois slam Intel for lack of volume, yet these same bois trumpet the glories of 4x4 -- total vaporware -- to high heaven??
There is ZERO data about who is really winning the so-called "price war". But "Sharkie: After the Fire" won't be deterred from a headline!
Go Sharkie, go!!! Pump that AMD. So we can all dump it and leave you holding your precious green sack.
Sharikou keeps saying that the 3800 frags the 965... and I had to think VERY hard to see the logic behind this, after having seen those benchmarks on thetechreport link he kept giving out. The performance of the 3800 and 965 is indeed similar, but if you're lookingat PERFORMANCE PER WATT, the 3800 does indeed frag the 965. Whereas the 965 can fry eggs to get that performance, the 3800 is merely warm and cuddly.
You know, the processors that AMD has at the top of their list isn't a good thing. 1 is a S754 processor and 2 are S939. Only 1 is AM2. This just points to the slow adoption of the AM2 platform, because of it's limited performance increase.
You comment about Conroe has undercut Netburst sales, but AMD announcing that the native platform for K8L is AM3 virtually makes the AM2 platform worthless. Why buy an AM2 when it's going to limit K8L performance and Conroe is available and is currently faster? If someone really needed a computer now, they might as well go Conroe or S939 since it wouldn't be much of a disadvantage.
shak, any comments about all those benchmarks showing conroe dusting off all amd offerings
Core2 rocks.. I'm buying one for my boy's new gaming machine. I'm going to over clocke that baby!
It Rocks
The article at the site below gives some insight into the price war.
http://www.amdzone.com/index.php?name=PNphpBB2&file=viewtopic&t=9831&sid=246b0e50d781b44f0b11ee7e1db93351
An interesting article:
The response to Core 2 Duo: What does AMD do next?
http://www.tgdaily.com/2006/07/28/amds_response_to_conroe/
If you guys are so anxious to get the Conroe go here:
http://forum.lowyat.net/index.php?showtopic=310386
Somehow I don't think that matters much. I mean newegg. While I'm not sure how many processors newegg sells, I believe Dell outsell newegg by a lot. Those who go to newegg are probably a very small percentage of computer buyers.
The highest margin machines are usually enthusiasts and coporate buyers. The former are relatively few, while the latter are usually Intel-only, even after K8's 3 years performance crown.
Someone above has noticed that even with Opteron's 35% share and highest share increase, AMD's revenue share is still behind its unit share. That means AMD sells more low-margin chips than Intel, even after Intel's heavy price cuts. Thus the major buyers of high-end chips still buy more Intel than AMD, and I assume those are mainly the corporate and institution buyers (many of those just want Dell, or simply do not want anything but Intel).
"As you can see, the Conroe just plain wins. In 32-bit mode it’s beating the Athlon by an average of 33%, clock-for-clock. The Athlon X2 benefits much more from the jump to 64-bit (average 63% gain), but the gains for the Conroe are still impressive (average 40% gain). The elder Xeon system is left in the dust; it just can’t compete anymore especially without 64-bit support. The Core 2 Extreme X6800 beats it in 32-bit mode by 80%, and if you compare the X6800 running in 64-bit mode to the Xeon in 32-bit, the performance delta jumps all the way to 160%. The Athlon 64 3200+ putters around and ends up in last place, mostly due to being only single core. I’ve included its numbers mostly as a base reference."
We can see how Conroe super-frags AMD here.
Users care about performance.
Sharkie Man-Fanboi lovers talk about how lots of high speed cache is bad and how the vaporware they have in their closet is going to vanquish Intel. Even when AMD just set the minimum price point for their Vapor-Ride 4x4 to $1000!
Sharkie's Man-Fanboi Love Assocation will have to work overtime on the spin, to say the least.
Maybe it is bad for users if your processor is too fast? Maybe they will feel trauma because they won't know what to do with the extra time they now have on their hands?
Yeah, that's it. "Avoid free time trauma! Buy Right-Speed AMD chips now!"
Of course if AMD delays their new chips any longer (or ships more obsolete duds like AM2) then we have a great situation for marketing. The chips will already be marked with how long they take to run vs. Intel chips. That's right, all that "X2" will be good as it will tell the customer, "This chip takes twice as much time as Intel. There is absolutely no speed trauma or free time trauma with these X2 chips!!"
Go Sharkie, go! They will hire you at AMD any day now!
http://www.overclockers.com/tips01005/
10 min video of AMD/ATI merger with Pat Morehead.
http://enthusiast.hardocp.com/article.html?art=MTEyNiwxLCxoZW50aHVzaWFzdA==
I would like to point out.
NO x86 acrchitecture is capable of 64-bit technology.
Only SPARC 64 and IA64 are. These are used at enterprise / server levels.
Besides, Sun have an 8 core cpu and it does Super PI in a second.
True 64-bit would be considering this stuff :)
http://www.overclockers.com/tips00996/
This article was an excellent analysis of the challenges AMD is going to face in the medium-term time frame. It doesn't factor in the initial innefficiencies of trying to integrate the ATI purchase as well as the cash flow hit that is going to incur. Interest on 2.5 Billion has to weigh down their EPS in some significant way. The Dell deal isn't goint to be that great for AMD. Dell plays hard when it comes to component pricing and Dell is going to use the Intel stick against AMD when it comes to pricing just like they did for years against Intel. So I wouldn't expect profits to increase for AMD and volume may not go up that much either since AMD is capacity constrained. I see AMD going to a profit loss situation until they can iron out their capacity issues.
After reading this blog for a while, I think that Sharikou is being paid by Intel. Really!
Have a look at his blog and comments - it is actually a salesman playground! Sharikou represents most biased (customer) point of view in AMD favor, and he keeps posting tough questions (about Intel future). Moreover, he supports his position with as much evidence as possible. The blog can be used as a training tool for Intel salesforce!
For myself, the blog and comments is very valuable source of information (after filtering all the "kill yourself" fanbois BS)
To funny..
AMD claims benchmark leadership and power / watt and charge high prices.
Then INTEL introduces the greatest design breakthru and crush all of AMD's leaderships.
What does AMD do drop their prices 50% and their revenue/profts by equal amount. But its hard to stay postive on profits with so little to start. Same volume, half revenue, same cost = Losses.
INTEL had 8 billion of profit to absorb any price reduction.
It is AMD that will lose the war. Sure they may maintain marketshare short - term. As MS swings take a few quarters to realize. There is no question that INTEL will grow MS while AMD drops prices to protect and sustains losses.
In addition they take on 2.5 billion debt to try and buy another money losing company. Wow they do this to match INTEL's capability in chipsets and GPUs. INTEL probably makes more money on chipsets then AMD makes on CPU and what does AMD do take on 2.5 billion debt to by a money losing organization to compete. And to make matters worst the best and brightest of ATI are already looking to leave. Who wants to be bought by a company that always has one foot in the grave.
The only reason AMD is profitable or alive these past 5 years is because Craig Barrett and Paul Otellinni totall fucked up the company.
Craig wasted 15-20 billion on aquisitions that amounted to nothing ( similar to AMD's purchase of ATI ). Paul and Craig continued to poor billions into Itanium and communications only to finally now start to trim this.
They allowed NETBUST to live 2 years too long.
In the end it is INTEL's incompetence that allowed AMD to survive and prosper. The bad news is that now INTEL's is revisiting all those bad decisions. They still have great manufacturing, tehcnology, and the best design now.
Grimm time for poor Sharkiou and his AMD fanboys.
Its fun to watch the BS he spews.
The Doctor
Moreover, he supports his position with as much evidence as possible. The blog can be used as a training tool for Intel salesforce!
My primary goal is being correct. For instance, I suggested many many times the right moves for Intel to survive. Some of Intel's current moves have been discussed by me long time ago. In fact, Intel execs are on my mailing list and they receive my strategic analysis regularly. Intel can still avoid going BK, if they quickly ramp down and dowsize to 40% of current level.
If an Intel sales guy can argue and win on merits here, then he is qualified to be Intel CEO.
What does AMD do drop their prices 50% and their revenue/profts by equal amount. But its hard to stay postive on profits with so little to start. Same volume, half revenue, same cost = Losses.
This is a common misconception by people lacking IQ.
Revenue = SUM_i (price_i * units_i)
where i is the product.
Now, suppose you drop the prices by 50%. You have
Revenue' = SUM_i (0.5 * price_i * units_i')
It's the so called mix that will determine the revenue. As AMD projected in its 2Q06 CC, they expect its ASP to be stable (around $100). Why? The mix changes.
On the other hand, we can prove Intel's ASP will go downhill. Why?
Because Intel's ASP was $150. And looking at its new pricing list, the average will be far below $150.
For Sharikou,
I thought you might be interested in the latest Conroe shipping estimates.
http://www.hkepc.com/bbs/itnews.php?tid=639685&starttime=0&endtime=0
And Vincent emphasized that the market will not lack of Core 2 Duo processor, they have plenty. He expected 2 million of Core 2 Duo desktop processor will be delivered before 2006 Q3.
So now they are saying 2 million Conroes shipped before Q3 closes. That's not that bad considering that doesn't include Merom and Woodcrest.
On the subject of Merom, it's possible the slower introduction of Conroe may be because most of the chips are going toward Merom.
http://www.hkepc.com/bbs/itnews.php?tid=639535&starttime=0&endtime=0
Intel looks to directly replace Yonah with Merom in the same price points. Yonah won't even receive price drops. There probably isn't that high a Yonah inventory and the rest will probably be cleared as cheap T2300Es or those unofficial T2050 and T2250 models.
That article also mentions that SLI is now official for mobile chipsets for notebooks and small form factor desktops. I guess this is the first phase of the tighter nVidia/Intel relationship.
So now they are saying 2 million Conroes shipped before Q3 closes. That's not that bad considering that doesn't include Merom and Woodcrest.
2 million for 65 days. 2,000,000/550/65= 55. 55 Conroes/per vendor/per day. Not going to save Intel from operating loss. No one has seen Merom yet. Woodcrest is still missing.
nVidia is going to be screwed if it bases its business on a relation with Intel.
http://www.theinquirer.net/default.aspx?article=33320
Dresden's AMD Fab36 is only doing at 20% of capacity..
they might be hable to start spitting gpus by the end of the year.
2 million for 65 days. 2,000,000/550/65= 55. 55 Conroes/per vendor/per day.
Just out of curiosity, how many AM2 CPU's will there be sent to vendors before end of Q3?
I honestly don't see what the problem is regarding the surplus Netburst stock.
Intel is doing the sensible thing and selling them at bargain pricepoints.
For all intents and purposes, Celerons are now the ultra low end, P4s the low to medium end and Core 2 the middle to high end.
It's common knowledge that the lower end chips by far dominate sales volumes.
We all know that the vast majority of the public know jack about relative CPU performance and the like.
I bet 99% of the people on the streets don't read CPU reviews. It's those people that Intel will rely on to get rid of their stock, the ignorant ones who know no better.
How the heck do you think Intel was still maintaining close to 80% marketshare with slow and hot P4s? Because the general public don't know any better, they go with the 'safer' or 'bigger' brand in Intel, instead of AMD.
I just dropped a cool 245 bills(+tax) and upgraded to an AMD Athlon 64 X2 4600+ from an AMD Athlon 64 3500+. Now thats bang for your buck. My A8N-SLI Deluxe still has plenty of life left. This is what many AMD'ers have been waiting for. The 3500+ fit the bill nicely while we waited for the prce to drop. No need for a new Mobo, ram, cpu. Just replace the old with the newer.
I missed out on $320 AMD Atlon64 X2 4800. Those sold ut last night at all the mom and pop shops in San Diego. The Athlon 64 AM2 5000 sells for about $320 also.
Type this in.
www.computoredge.com
Click on San Diego
Under Advertisers click on CE Advertisers
Check out
ChipsandMwmory.com
MicroPC Outlet
ComputerDepot
Comp1
Use the PDF Version so you can zoom in to view pricing.
Thank you Graham for the article I learned a lot.
Re: post 10:16 AM, July 29, 2006
As the author pointed out he would inject “simple math” on AMD’s production dilemma comparing yield with die size and he is probably correct. I don’t make cpu’s so I confess I wouldn’t know. However I’ve been involved in a few takeovers, purchases and mergers. I guarantee you sitting in powwows are Production experts, Scientist, Engineers, Professors, CPA’s, PHD’s, MBA’s, CEO’s, CFO’s, lawyers, Centergy Specialists and Bankers plus a hundred other titled professionals doing hard math and sometimes get it right. Two successful companies may find away.
Be Well
Dr Blog,
your post was so good I had to read it three times. Thanks for taking the time.
btw: entrophos is also gifted
"Because Intel's ASP was $150. And looking at its new pricing list, the average will be far below $150."
Is this based on desktop only? Are you factoring in mobile and server pricing?
One other thing to keep in mind is generally the cost to produce a wafer goes down over time for a given technology node and yields go up a bit. While this doesn't change ASP, it helps the cost side of the equation for both Intel and eventually AMD when they get to 65nm (and therefore profitability).
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