Author Topic: AMD's 4x4  (Read 1955 times)

Offline Mini D

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AMD's 4x4
« Reply #45 on: November 21, 2006, 08:01:00 PM »
Kev... I wouldn't mind an explaination or some kind of link for your "intel is losing money on every CPU they sell" statement.

Offline Kev367th

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« Reply #46 on: November 22, 2006, 12:07:01 AM »
Quote
Originally posted by Mini D
Kev... I wouldn't mind an explaination or some kind of link for your "intel is losing money on every CPU they sell" statement.


Should have qualified it, every CPU typically used by the home user.

Easy to find, just go digging on the web.

Basically they are using a common business practice -
Using one part, or parts of the business (chipsets etc), to keep the prices competitive on the home CPU's, even though it means they are being sold below cost.
Not wrong, it's a common strategy.

Handy - Yes I know, but the costs are going to be way beyond what most were expecting. Even if as has been suggested the top end pair will on par ($999) with the top end Conroe, you now add a $480 mobo, 4 x DDR2 DIMMs (2 for each CPU), and an PCI-E graphics card. (for me anyway, still using AGP).
« Last Edit: November 22, 2006, 12:10:55 AM by Kev367th »
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Offline Mini D

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« Reply #47 on: November 22, 2006, 07:29:02 AM »
It's not easy to find kev. It's not a "common buisness practice".

You made the statement, please back it up. I'd venture to say a corporation that has made 9 billion in proffit so far this year is not selling every one of their chips at a loss. I'd venture to say a company that has made 2% of the proffit while holding 20% of the market has much less room for price adjustment. That's just an observation.

I don't think you really understand chip sales much at all. It really comes off like you've been to an AMD fanboy club where everyone starts talking about how Intel is willing to lose money on chips to drive AMD out of buisness when there really isn't much of a clue as to how that works.

Our low end CPUs are, by far and away, our biggest sellers. They always have been. The server CPUs make money, but they don't make the money that the little stuff does. Can you explain how our biggest selling product is sold at a loss? Can you explain how selling 40 million processors and turning 10 billion in revenue is possible when 30 million of those processors were sold at a loss? Do you think we make all of our money on chipsets?

That statement is so out of left field, I just had to respond.

Offline handy169

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« Reply #48 on: November 22, 2006, 10:20:37 AM »
actually didnt intel report loses this quarter???  i could be wrong but i know they are losing money more and more each quarter

http://www.infoworld.com/article/06/04/20/77574_HNintelprofitfall_1.html

Offline Kev367th

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« Reply #49 on: November 22, 2006, 10:42:31 AM »
No probs Mini-D just give me some time to find it, was looking for something else at the time and just happened to read it.

Actually it is not usuall for a business to use one part of business to prop up or make it possible to sell things below production/R+D costs in another part.
Whole idea being eventually you start to break even on them the more and more you sell.
Typical early / mid/ late life product cycle.

As long as the overall result is a profit.
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Offline Mini D

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« Reply #50 on: November 22, 2006, 10:55:57 PM »
Quote
Originally posted by handy169
actually didnt intel report loses this quarter???  i could be wrong but i know they are losing money more and more each quarter

http://www.infoworld.com/article/06/04/20/77574_HNintelprofitfall_1.html
You are most definately wrong given that the link you cite reports 1.3 billion in proffit. Intel has not had a quarter in the red for at least 13 years. AMD has.

Offline Mini D

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« Reply #51 on: November 22, 2006, 10:57:37 PM »
Quote
Originally posted by Kev367th
No probs Mini-D just give me some time to find it, was looking for something else at the time and just happened to read it.
No problem. It should, as you said, be easy to find by just "googling it". I, however, didn't find anything other than some saying "intel sells chips at a loss" on message boards in the 3 hits that I could round up.

Offline Mini D

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« Reply #52 on: November 22, 2006, 11:00:28 PM »
PS... once you've recouped your expenses, nothing is "being sold at a loss".

Offline Nomak

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« Reply #53 on: November 24, 2006, 05:48:52 PM »
Thx for taking the time Schutt.  

It does make sense.  Although I still want to believe that my 4.0 805 is faster than the 2.1 Conroe (Shrug) ;)

Dave

Offline Mini D

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« Reply #54 on: November 29, 2006, 11:51:54 PM »
Quote
Originally posted by Kev367th
Actually it is not usuall for a business to use one part of business to prop up or make it possible to sell things below production/R+D costs in another part.
What is that "other part" that makes the big bucks for Intel and helps to subsidize the chip sales? You aren't suggesting that we make all of our money off of DELL and sell our processors directly to the consumer at a reduced price are you? Because... that's so anti-normal-buisness it's hillarious.

Come on Kev... it's been a week. Where's the easy to find info on this.

Offline Skuzzy

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« Reply #55 on: November 30, 2006, 07:26:11 AM »
Kev, I have stayed out of this, as I know MiniD works for Intel and is in a better position to answer the claim you made.

But, for the love of logic, think about it.  Smaller process yeilds more dies per wafer.  This is a substantial cost reduction per die.  If the yeilds are good, and I see nothing the marketplace to suggest Intel is having any kind of yeild problems, then Intel should be able to undercut AMD AND do so with a higher net profit per CPU.

It is just logical.  

From a business side, Intel had to figure they had a winner on thier hands, and also knew AMD would not be able to compete.  Sales projections probably were on the order of 100% higher (a guess) than previous processors.  So they are able to amoritize the development costs over a larger number of parts, keeping the costs lower than previous generations of CPU.
Now that was just some speculation.  I really have no insight to how Intel handles its amoritization schedules, but a per part schedule over some period of time is generally the method most companies use.  The time period is generally the projected peak sales life of the product.

At any rate, there is no way AMD's larger process can be produced cheaper than Intel's smaller process, given good yeilds for both companies.
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Offline Mini D

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« Reply #56 on: November 30, 2006, 08:01:30 AM »
The chip is smaller and the wafers are significantly bigger. I don't know if AMD still suffers much from yield issues, but I do know that Intel does not on anything it's currently making.

The only processors that I know of Intel selling at a loss were the original Pentium chips. The yield on those chips weren't measured in chips per wafer, but rather wafers per chip. That ended in late 92. Hell... even the Itanic is a money maker and I don't know that the chip was really ever intended to be.

Kev... both companies are kicking around a 45-50% proffit margin on thier chips right now. Nobody is even close to claiming that chips are being sold at a loss. If you'd like to know who has more room for price reduction, you really should just look at corporate proffit over the last... oh... 10 years.

Offline Mini D

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« Reply #57 on: December 05, 2006, 05:10:02 PM »
OK kev... since you couldn't provide a link, I will:

http://www.intel.com/intel/finance/earnings/IntelQ32006EarningsRelease.pdf

Look at page 10.

Offline Kev367th

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« Reply #58 on: December 06, 2006, 09:21:56 PM »
Quote
Originally posted by Mini D
OK kev... since you couldn't provide a link, I will:

http://www.intel.com/intel/finance/earnings/IntelQ32006EarningsRelease.pdf

Look at page 10.


Sorry Mini_D, my Mums been in hospital the last 16 weeks and it gets a little hectic sometimes.

Profits don't tell the whole story -

i.e. compared to last year  - Intels quarterly profits are down between 35% and 52%.

AMD are up, compared to last year.

Diff topic -
Upgrade soon, got a question for you that may help me decide -
Will the native Intel quad cores work with the current C2D motherboards?
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Offline Mini D

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« Reply #59 on: December 06, 2006, 09:46:12 PM »
Kev,

I wish to point out you haven't provided anything to support your "intel sells it's processors at a loss" statement. I have provided a link that outlines Intel's income and breaks it down by category showing how much of their revenue is generated by processor sales, you have shown nothing.

It's about time to admit you just might have been wrong on this one. Right now you're trying to throw up vague replies as some kind of defense and it's just not working.

Have a nice day!