AMD need to get it right now...

[Tooks]

This may seem a bit of a strange post from somebody who currently has an Intel/Nvidia setup, but I really hope that AMD get their Barcelona and DX10 graphics cards right.

I was reading in Micro Mart this morning that AMD has suffered massive losses the last two quarters, $529 million in the last quarter of last year, and $611 million in the first quarter of this year. Apparently, they've got $1.2 billion in the bank, but clearly if things carry on as they are, they are in serious trouble within 6 months. They appear to be trying to raise $2.2 billion through some kind of 'share issue'.

There is also talk of IBM making a bid for AMD if things continue to go the way they are.

Clearly, we need a strong competitive CPU/Graphics card market to stop Intel and Nvidia charging what they like, so I really hope their new products are the bees knees!

I'm thinking we should all buy AMD/ATI next time around just to make sure they stick around!

 

[NathanE]

They'd have to make some big mistakes to go bankrupt... there's too many banks out there that are falling over themselves to lend them money!

They are only making losses in the desktop segment at the moment. Their server market profits and share continue to rise.

 

[Tooks]

Those figures include any profits they are making on the server market, so the results would be even worse if they weren't strong in that sector.

I agree they're not going to disappear, and I'm sure banks would fall over themselves to lend them money, but it's not good if they end up having to borrow a pile of cash either, as that debt needs to be serviced which means spending has to be curtailed in other areas compared to now.

As I said, I just hope their next products are real hum-dingers that kick Intel/Nvidia where it hurts! That way, better competing products will need to be developed, and we the consumers all benefit. Well, that'd be my ideal scenario anyway!

 

[Firegod]

Could it ever get to a point where a company like, for example AMD could dissappear? What would happen with regards to Intel. Hypothetically, they'd have a monopoly, yeah, which isn't allowed is it?

 

[Cob]

Their losses have as much to do with Intel dumping loads of very very cheap stock (old Pentiums and Celerons) into the channel as anything.

AMD had to slash their prices to keep up.

These things usually balance themselves out over time.

 

[fastwunz]

they do have a monoopoly but there aint nobody on the planet who is actually going to do anything about it - and come one, AMD really really isnt any cheaper anymore - they just have a fan base of loyalty thats all.

 

[Dureth]

The comment above is so true. There has been a massive surge of ultra cheap chips from Intel in the low end. This is the segment of the market that makes both companies the majority of their profit. AMD has had to slash Sempron, single core A64 and low end X2 prices to stay even remotely in touch with Intel's pricing. As these stocks run out I'd bet we see a slight creep upward of the low end prices.

AMD arn't going anywhere. They have investors willing to pour massive amounts of cash into them and are willing to do so for the long run.

 

[Corasik]

Their losses have as much to do with Intel dumping loads of very very cheap stock (old Pentiums and Celerons) into the channel as anything.

AMD had to slash their prices to keep up.

These things usually balance themselves out over time.

To be honest, I would imagine that Conroe's cheap pricing has had as much to do with it. AMD X2's have had their prices slashed to remain price competitive with Core 2 Duo.

X2 3800's were $354 before Core 2 Duo was released. It quickly dropped to $138 after Core2 came out, then down to $113, and now just $83.

So in the mainstream markets the margins were slashed. Of course this was only made worse by P4's and Celerons being dumped into the channel, for use in low budget computers, and Auction sellers trying to fool people into believing dual Core P4's run at 6.4Ghz etc

Still, Hopefully AMD will release a new/great chip soon. As consumers the price war is certainly in our favour.

 

[Stranjah]

I just hope that the r600 is released at a sensible price so I don't have wait ages for the price to drop.

 

[Gonzo0]

Could it ever get to a point where a company like, for example AMD could dissappear? What would happen with regards to Intel. Hypothetically, they'd have a monopoly, yeah, which isn't allowed is it?

I think a monopoly is allowed, i mean whats to stop intel becoming a monopoly if AMD (howerever unlikely) dissapear. Microsoft are a monopoly are they not, no other company makes windows.

Did i learn anything in GCSE Business Studies??

 

[Firegod]

I think a monopoly is allowed, i mean whats to stop intel becoming a monopoly if AMD (howerever unlikely) dissapear. Microsoft are a monopoly are they not, no other company makes windows.

Did i learn anything in GCSE Business Studies??

But with regards to supermarkets and that there was all that uproar about certain chains having too much of the market.... or sommit.

Lol I dunno, it was hypothetical.

 

[Stranjah]

Open that can o' worm LOL!

 

[Participant]

I think a monopoly is allowed, i mean whats to stop intel becoming a monopoly if AMD (howerever unlikely) dissapear. Microsoft are a monopoly are they not, no other company makes windows.

Did i learn anything in GCSE Business Studies??

All depends how you define the market. As such defining a monopoly can be much harder than you'd think.

 

[pastymuncher]

I have to admit that when i read that article the other day it started off the old alarm bells. There's another comment on one of the articles (computing 101/fanboys) in the same issue that basically says that if you are wanting the best components for your pc (and lets face it, most of us do) then C2D is the best that you can buy. Yet AMD "fanboys" proclaim the benchmarks are rigged, or that AMD will bounce back and that AMD is the enthusiasts friend. Like the article says, AMD does'nt give a stuff about the end users and all they care about (the same as any large company) is making money. It goes on to say that their loyalty is just simply misguided.

There are a couple of other comments in the same issue having a dig at AMD and Micro Mart is not the only mag that's doing this lately. Ok, AMD has lost the performance crown and for the time being it does'nt look to be getting any better but Intel was out in the wilderness for a long time with the P4. They came back with the awesome C2D and we have to hope that AMD can come back with something as well.

I myself don't care who is on top. I will get the best i can for the money. Previously it was AMD so i had a couple of 754 rigs and then a 939 rig. Now Intel is on top i have a C2D rig. We have to hope that AMD can come back just to promote some competition and prevent a monopoly situation where one manufacturer can basically charge what they want for their products. That is good for none of us.

I think AMD's biggest mistake was buying ATI. It would seem that they have overstretched themselves and may end up ruining both companies in the process.

 

[Gonzo0]

Well i define a monopoly as a company that has a product that no other company makes therefore if people want that product their only choice is that company so Microsoft benefit from all the people that NEED a windows operating system and have only Microsoft to go to. If AMD failed then that would only leave intel in the microprocessor market making them a monopoly as only they make microprocessors (unless there is another company out there that i dont know of)

Atm Intel are what is know in Business terms as a 'star' i.e they have high market growth aswell as market share. This is part of the boston matrix

 

[NathanE]

I think the purchase of ATI will come up trumps in a few years.

Intel has never been all that good at graphics chipsets (just look at their onboard stuff).

When their ATI department starts producing some technology that can be retrofitted straight onto a K10 (I cringe referring to it as that) derived core then it immediately places AMD straight back to the top of the mobile/laptop pecking order. And there's plenty of emerging markets (media center PC's, IPTV STB's) that would benefit from a single chip that can run the OS *and* producing HD output.

I personally don't think AMD will regain the desktop market for any substantial amount of time for a long long long time. They just can't compete with Intel's production capacity and it's unlikely they will ever gain such a substantial lead over Intel again like they did with the K8.

 

[Stranjah]

k8

 

[londonbairn]

I think a monopoly is allowed, i mean whats to stop intel becoming a monopoly if AMD (howerever unlikely) dissapear. Microsoft are a monopoly are they not, no other company makes windows.

Did i learn anything in GCSE Business Studies??

Article 82 of the EU treaty basically indicates that as long as monopolies do not abuse their power, then it's ok. AFAIK in the UK they use as a guide that a firm with 25% market share they suspect is a monopoly. There is also other measures used to estimate market power, like conduct parameters, Lerner Indexes, HHIs etc....

Not all monopolies are bad. Just depends on if they do indeed try to capture too much consumer surplus through blatant first degree price discrinimation etc.

(PS I'm a postgrad economist )