Thursday, April 19, 2007

My RECOMMENDATION to AMD on strategy

To quicken the collapse of Intel, AMD should PERMANENTLY lower the price of desktop CPUs.

Except the FX line, all AMD desktop CPUs should be sold at price between a narrow Window of $50 to $150. Since AMD's APM process is so good, the chips they produce are nearly identical, this allows AMD to mark their CPUs at higher rating.

The pricing table should look like the following
1) Athlon 64: $50 to $60
2) Athlon 64 X2 4000+: $65 but with 10% volume-- this makes sure all Pentium Ds will be sold at lower than $60.
3) Athlon 64 X2 5600+ and up : $85 to $95
4) K10 dual core : $120 to $150

With such a pricing scheme, Intel's ASP will collapse. In less than three quarters, Intel will BK.

33 Comments:

Blogger DaSickNinja said...

What? Are you really on AMD's side? You're off your bloody rocker man. AMD isn't receiving much profit as it is, and the only reason they dropped the prices is to maintain at least one market sector from falling to Intel. They don't lower prices because they can, and they want to, but because they have to.

10:30 AM, April 19, 2007  
Blogger PENIX said...

Intel has much higher overhead, as well as failed non-cpu projects. I think Sharikou is right.

10:34 AM, April 19, 2007  
Blogger DaSickNinja said...

Got proof?

10:41 AM, April 19, 2007  
Blogger R said...

I agree. I also believe the war is coming to its zenith; however Intel has deep pockets and this could easily backfire. This war over market share has no rules of engagement and more affordable computers would be good thing, for awhile.

11:15 AM, April 19, 2007  
Blogger Dahaka said...

This comment has been removed by the author.

11:16 AM, April 19, 2007  
Blogger ililpfxhlu said...

I agree. Athlon is worth junk. We can see the positive effect of even more fire sales. AMD down Intel up LMAO

11:41 AM, April 19, 2007  
Blogger middle_of_the_road said...

Sharikou said :-
With such a pricing scheme, Intel's ASP will collapse. In less than three quarters, Intel will BK.


And what will happen to AMD's already reduced ASP ?

Your strategy like most of your posts are flawed.

11:43 AM, April 19, 2007  
Blogger R said...

Whoops, I have quickly reconsidered.

This plan would fail. Time is on Intel’s side when it comes to money; Intel is “Daddy War Bucks” whom could print as much virtual money as it needs (stock) and has a huge credit card with BofA not to mention its assets. AMD’s only weapon is technology, because its marketing department has been in out to lunch for years.

11:47 AM, April 19, 2007  
Blogger PENIX said...

r said...
Intel is “Daddy War Bucks” whom could print as much virtual money as it needs (stock) and has a huge credit card with BofA not to mention its assets.


BK rarely means dissolving the company and selling all assets (chapter 7). A company can go BK and file for chapter 11 which allows for continued operation and does not require the sale of assets.

11:59 AM, April 19, 2007  
Blogger Bubba said...

Ahahaha!

I agree with you Doctor. AMD should sell all their Athlons at a loss!

It's exactly what they are worth.

12:03 PM, April 19, 2007  
Blogger R said...

Good point Penix

My main point is, Intel has so many resources to fight a prolonged war that maybe this strategy wouldn’t be the best choice. Having the absolute best product may have the same effect but a slower kill.

12:16 PM, April 19, 2007  
Blogger enumae said...

Sharikou

What will this due to AMD's margins?

What effect will these prices have on AMD's CapEx spending?

How does Intel at 45nm while AMD is at 65nm effect your post?

Thanks

12:44 PM, April 19, 2007  
Blogger Tom said...

So AMD is losing over 4 million dollars A DAY selling at their current ASP and you think they should cut their prices in half.

Are you sure you don't work for Intel?

1:03 PM, April 19, 2007  
Blogger Tom said...

Another thing I don't understand are the predictions of Intel bankrupcy. Intel is generating boatloads of cash and buying back billions of dollars in stock every year with their cash flow. They also have about 8 billion in cash and short term assets in the bank. In addition they could easily raise more capital in the equity or debt markets...

How could they possibly go bankrupt in the next year or 2. It makes no sense no matter how well AMD executed and Intel screwed up.

I'm convinced this shakirou guy is just getting a kick out of posting outragous rants and seeing the response and possibly and intel employee.

1:13 PM, April 19, 2007  
Blogger Evil said...

Again Ph(ake)d...

Why is it acceptible for AMD to drop its prices, but not for Intel to do so...

Unlike Intel AMD cannot afford to lose money on processors.

1:20 PM, April 19, 2007  
Blogger Tom said...

whoops... did I say 4 million a day. I meant 7. Ouch... amd reported horrible numbers

1:22 PM, April 19, 2007  
Blogger Scott said...

Intel has a profit of 1.6 Billion in Q1, AMD loses .6 Billion. I don't know why you all can't tell that in 5 Quarters, Intel will be bankrupt. makes perfect sense to me!

*note the sarcasm*

2:22 PM, April 19, 2007  
Blogger Roborat, Ph. D. said...

sharikou: "To quicken the collapse of Intel, AMD should PERMANENTLY lower the price of desktop CPUs."

feeling the heat of the fast approaching Q2'08?

it looks like you're willing to sacrifice AMD just so you could be right in your fanciful prediction of Intel bankruptcy.

4:44 PM, April 19, 2007  
Blogger oneexpert said...

Actually according to the NYSE news intel did not have a profit of 1.6 billion on sales.
Intel lost 4 billion dollars worth of sales to AMD.
The 1.6 billion profit is from a 19% one time tax accounting charge off but not from sales.
So intel lost all profitability in the same quarter that it lost 4 billion dollars worth of sales to AMD.
This is why every other word from the intel fud dept is trying to destroy AMD.
Intel is running scared and confused.
Intels fate seems sealed now.
The c2d has killed all sales and profits and the quad core will be obsolete with the release of the k10.
No matter what AMD announces intel fuds it within 48hrs with some as yet imaginary product or performance claim.
Intels 1.6 billion profit is based on the Enron accounting methods.
Footnote, the AM2 4800 brisbane is a real nice chip compared to the e6600 power hog and hey, its cheap to buy and outperforms 99% of the old super charged pentium 3 c2d line up.

4:54 PM, April 19, 2007  
Blogger Tim said...

oneexpert = sharidouche. Same broken english and horrid sentence structure....quit posting under multiple IDs....

5:27 PM, April 19, 2007  
Blogger Tim said...

This comment has been removed by the author.

5:29 PM, April 19, 2007  
Blogger Tim said...

Oh and if Inte lost 4 billion worth of sales to AMD please, enlighten us how that 4 billion fits into AMD's Q1 report? Care to take a stab at it?

5:32 PM, April 19, 2007  
Blogger Bubba said...

Intel has a profit of 1.6 Billion in Q1, AMD loses .6 Billion. I don't know why you all can't tell that in 5 Quarters, Intel will be bankrupt. makes perfect sense to me!

Best. Post. Ever.

5:38 PM, April 19, 2007  
Blogger DaSickNinja said...

Oneexpert, got some proof to back that statement up?

6:09 PM, April 19, 2007  
Blogger gdaf123 said...

Well, we all know your recommendations should be trusted:


Re: You guys should had bought AMD toda
by: sharikou 03/10/06 01:30 pm
Msg: 805830 of 806172

Tell you what, I have a rule not to use margin.
But I broke my own rule this morning and bought AMD.



I project 3Q06 operating loss for INTEL
by: sharikou 03/09/06 05:48 pm
Msg: 805365 of 806174

now, you can plan your trading strategy based on that million dollar hint

6:45 PM, April 19, 2007  
Blogger lex said...

LOL

Another "Ph"ony "D"octrate recommendation.

INTEL annouced 1.6 billion profit
AMD annouces 600 million.

The Phonys recommendation, why doesn't AMD improve its position by dropping prices more and selling ever y CPU at a cheaper price so then can lose more on more units.

AMD loses more and forces INTEL to make less. Is it any wonder he is a "Ph"ony...

9:24 PM, April 19, 2007  
Blogger Tanrack said...

How much does it cost AMD to make 90nm X2 CPUs? How much does it cost AMD to outsorce making CPUs?
How long before all their current X2s will be made on 65nm only.

2:33 AM, April 20, 2007  
Blogger Tanrack said...

Lets see:
"The firm had warned it was heading for a loss-making quarter and indicated the figure would be in the region of $250 million."
They lost $611 million.

oneexpert said: "So intel lost all profitability in the same quarter that it lost 4 billion dollars worth of sales to AMD"
So where did the $4 billion in lost Intel sales go, oneexpert?

"In all, the company sold some $1.2 billion worth of chippery in the quarter, but failed to turn this into a profit. "
AMD did not get it.

from http://www.theinquirer.net/default.aspx?article=39049

2:59 AM, April 20, 2007  
Blogger Aguia said...

"So where did the $4 billion in lost Intel sales go, oneexpert? "

I think what he means is that AMD denied Intel 4 billions in profit. It as gone obviously to no where?

I have one product that cost 100$ each, I'm expecting to profit $10 billion out of this.
Other guy come and says can do it for 60$ each, so I'm forced to lower my price and obviously my profitability, instead of $10 billion I will only do $6 billion. Where did the $4 billion go? No where. Not for me but also not for the other guy.

4:03 AM, April 20, 2007  
Blogger Tanrack said...

sharikou, how will "Last week, AMD announced a cost-cutting restructuring plan that will include slashing spending by $500 million on new manufacturing capacity." from http://sanjose.bizjournals.com/sanjose/stories/2007/04/16/daily70.html impact AMD's capacity expantion?
oneexpert, Intel Q1 2006 sales was $8,940 billion, this year Q1 it is $8,852. Where did they loose 4billion because of AMD? Do you recon they would have made $12,852 if it was not for AMD?

5:47 AM, April 20, 2007  
Blogger Tanrack said...

300 mil is from that was from a tax windfall, the rest must have come from somewhere else:
"Santa Clara-based Intel, the world's largest semiconductor company, said it benefited from its rapid shift to a new chip-making process and a big tax windfall that added $300 million, or 5 cents per share, back into the company's coffers." from http://www.forbes.com/feeds/ap/2007/04/18/ap3623796.html

6:40 AM, April 20, 2007  
Blogger Tim said...

Shouldn't that be "Strategery" there Sharidouche? Seeing as how you and our illustrious president are about the same IQ level and both like to make stuff up then you should be using the same words...

12:14 PM, April 20, 2007  
Blogger yauipop said...

Yes, they should drop prices as much as they can! Most people don't need the performance of Core 2...athlon X2 is the best value CPUs out there. It helps when AMD is subsidising your computing needs :)

10:22 PM, April 20, 2007  

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