AMD vs Intel – our readers write
Sherriff's email account gets blitzed
So far almost 100 readers have given me a piece of their mind on yesterday's piece concerning Athlon posing no real threat to Intel. Some of the pieces of mind have been returned to their owners as they obviously need all the pieces they can lay their hands on, but the overwhelming view seems to be that a) AMD isn't a threat to Intel, b) this is a shame, and c) Athlon is great. Boris Markov took issue with the relative margins Intel and AMD are making, claiming that AMD can sell processors at an ASP of $100, while Chipzilla's overheads mean the lowest profitable price would be nearer $160 a chip. Here’s the math: AMD calculation (for Q4/99): Windows cpu (K6 + K7): 5 million units at ASP $100: 500 M$ Revenue of computer group (wo. Windows-cpu): 70 M$ Memory group: 300M$ Total revenue: 870 M$ vs 850 M$ breakeven: profit = 20M$ (All numbers from Q3 results and conference call except the assumption of an ASP $100, which is depending on K6/K7 mix) INTC calculation (based on 1998) All profit from x86-business, rest of biz is generating losses! x86 units sold in 1998: approx 100 million at ASP $220 Profit 1998 approx. 5B$; tax 1998 approx 3 B$ Profit + tax = 5B$+ 3B$ = 8B$ => $80 per x86 unit ASP $220 - $80 = ASP $160 per unit to breakeven Hans Wee sent the kind of mail we like best - headed 'You are a moron', but then rather turned the gun on himself by predicting that AMD will soon have a 30 per cent share of the market. Thomas Hulstrøm’s ten cents’ worth was pretty representative: "I’m afraid you're dead right... AMD is at INTEL's mercy. If only those chicken taiwanese mobo-manufacturers would start churning out some decent Athlon mobos, customers would actually have a chance to buy one." Denis Baranov wrote: "This is too bad to be true... means it is true, doesn’t it?" Mike McFarlane, who’s both an AMD and Intel user: "The Register says: 'Flame Pete Sherriff, and we'll publish your replies', but how can I flame you when you're right about the Intel/AMD relationship? It's refreshing, and all too rare, to hear someone tell it like it is. Thanks!" Some wishful thinking hoping for an act of God came from R. Don Martin: "Who knows, Beaverton may be built on a fault line. A few more tremors down south and Western Cal. will crack off in the big blue too. And we'll all buy whatever they call Cyrix by then." A slightly paranoid John Matthews asks: "Could it be that the i820 has deliberately been delayed? While there is no i820, motherboard manufacturers are relying on BX chipsets. These they hadn't ordered in advance, because they had expected to be producing i820 boards. They must now rely on the 'generosity' of Intel, to supply them with BX chipsets, and it has been said that Intel would be more likely to supply manufacturers who don't make Athlon motherboards." Robbie Corrigan wants IBM to buy into AMD, make a few million chips ‘to spank Intel’ and then turn its attention to 'Bill and his little empire of bug makers'. Er, didn’t IBM try that once before? Renaud Hebert reckons that without AMD, Intel would never have produced the Celeron - and he’s probably right. Kirk Hole: "You are absolutely right. The situation reminds me of the form of 'democracy' that exists in some countries, where you have a party that has ruled for decades legitimised by the existence of an "opposition" party that only exists because the ruling party supports it. If this "opposition" ever became credible, the ruling party would quickly crush it, but doesn't want to do so because it would cause them PR problems with the West." Joseph Ronne appears to be a pretty level-headed chap: "Who cares about world domination outside an elite clique of bloated egos?" Anthony Monti displays devasting wit in his reply: "Let me quess - he (Pete Sherriff) uses an iMac and AOL to 'spew his creamy load?' Everyone loves the underdog in a fight...and as long as AMD stays the underdog...they will survive. Just like Windows will not be able to stop Linux." Yes, this kind of reader always gets round to Linux eventually. Phuc Pham writes: "Great article!!! I agree 100% with what you wrote. My friends and I were discussing the same issue a few months ago and we agreed that Intel is toying with AMD and not putting a full squeeze drive them out. I personally support AMD and will not buy Intel but facts are facts. Intel can go into predatory pricing mode and squeeze AMD out anytime. I think the idea of Intel allowing AMD to survive is now even more credible ever since Cyrix folded." Dan Pettis takes a different view: "Just give the news, and please keep the bullshit to yourself." Greg Gardner displays a degree of paranoia of which Intel itself would be proud: "AMD is a front company keeping the FTC off of Intel's back. Do you think there is anyone with the balls to call Intel’s bluff. Looks like Andy Grove owns Billybob Clinton." Sean Doherty observes: "I've got better things to do than replace my motherboard every time Intel wants to make more money off of its new, 'improved', overpriced Pentium Pro. Intel may get some of my hard earned money again if they decide to make something new and stick with it for more than a few weeks." Jim agrees: "There is a lot of truth in what you say, but Intel has not produced any new tech chips for many years! The P. Pro has been revamped time and time again, granted it is a good chip but something new would have been nice." Kevin E Mello takes a refreshingly anarchic stance: "Of course, there is always industrial sabotage. I have thought about that and, IMHO, the best way to destroy a billion dollar fab is to run through it with a big bag of salt, spraying it everywhere you possibly and conceivably could. The element sodium is a fast diffuser in silicon and it kills the devices. Even trace amounts on the shoes of personnel traced from salt thrown on roads has been known to nose-dive product yields. And plus, a saboteur running around a fab winging salt everywhere, that's entertainment." And finally, my personal favourite comes from Jakub Papierski: "Hey! how come you always get used as the target for flame-mail?? You should stand up for yourself more and say its not fair!" Oh, and before I forget, special thanks go to Andrew N for referring to Itanium as Itanic™ ®
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