Author: Robert Hyatt
Date: 21:37:35 02/21/03
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On February 21, 2003 at 10:19:30, Jeremiah Penery wrote: >On February 21, 2003 at 09:45:28, Robert Hyatt wrote: > >>On February 21, 2003 at 01:52:34, Jeremiah Penery wrote: >> >>>If you can sell a million 3GHz processors today for $600, and another million >>>3.2GHz processors next month for $600 (plus n 3GHz ones for $400 now), and then >>>a month later you sell a million 3.4GHz processors for $600, etc., why in the >>>world would you want to sell 1.2 million 4GHz processors today at $600, and lose >>>out on ALL those intervening speed grades? Do the math, and it just doesn't add >>>up. The chip companies make a lot of money by trickling out clock speed >>>advances, because they can charge more for the highest clocked parts. Releasing >>>something 2x faster today than what has previously been released is NOT going to >>>net them more money in the long run. Basically, it amounts to bleeding the >>>customers for all they're worth - and it works. >> >> >>I don't buy that. Because if I can widen the game between me and my >>competitor significantly, I am going to get a bigger share of the market, >>so producing a chip that is stamped slower than what it can actually run at >>doesn't make sense on the top-end of the market. Yes, I'd take my 3.2ghz >>line and siphon off some and mark them 3.06 and 2.8 and so forth, if there >>is a demand down there. But I'm not going to hold back my top-end chips >>as the more separation there is between me and my competitor, performance >>wise, the larger my market share. Otherwise there would be no SPEC, no >>THWP, etc... > >Intel already has 85%+ of the desktop market share, and probably even a greater >portion of the small server share. Killing the competition to gain that extra >10-15% market share does not net them more money in the short term (the math is >not complicated), and invites serious problems in the long run, such as possible >anti-trust investigations if AMD goes out of business. If Intel could take that last 15% it would be a _huge_ gain. Because then they could set the prices as they wanted. There is no anti-trust problems with making a chip so much faster than your opposition that they can not sell their product... > >>>Intel raises clock speed just enough to stay ahead of their perceived >>>competition. If AMD magically released a 4GHz part tomorrow, do you seriously >>>doubt that Intel wouldn't be able to follow suit almost immediately? >> >>Yes I do. Because they would have already released it to get the lions share >>of the top-end market where the profit is highest. > >Intel _already_ has the "lions share of the top-end market". Even more so than >the lion's share of the desktop market they have. Actually they don't. The "top end" market is dominated by other vendors such as MIPS, IBM and the like. It isn't a big market, but it is hugely profitable. You don't see intel chips in "mainframe-class" machines, but you definitely see MIPS and PPC4's and HP-PAs... and even alphas although their status is no longer clear...
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