Henri Richard explains why AMD failed to gain more marketshare

[qurious69ss]

I did not read your link or even your orignal post until now.

That is from the fall of 05. So it took two years of being the far better cpu for it to reach that point. And even at the point in time it barely outsold Intel systems. That tells me just how strong the Intel name was. Or how stupid the people are. Even after years of the athlon64 kicking the crap out of Intel and all the reviews and word of mouth. About half the people where getting the Intels still. The article also stated that AMD overtook Intel in October 05. That was a couple months after the x2 came out. It took all that just to beat Intel for the first time in US retail sector. To me that shows how to stupid the consumer is.

If the average consumer was smarter and did a bit of research before making a purchase AMD would have overtook Intel in this market basically as soon the athlons hit the retail channel. Not two and half years later and after a couple of months after the x2's where out. And in about 7 months or so from when the article was out the Core2duo comes out.

That fact that it took up until this point in time for AMD to outsell Intel in US retail sector is a flat out joke. And IMHO shows just how stupid the average consumer is.

Calling people stupid because they did not buy a computer back in 2005 with an Amd cpu is well....stupid. It goes back to what people are saying today when someone decides to get a computer with an i7. There is no need to buy a computer with an i7 when a P2 965 is more then capable of handling what people use a computer for yet there are some people where the performance of an i7 is worth it. Back in 05 a P4 too was more then capable of handling what people used a computer for.

 

[Chad Boga]

Calling people stupid because they did not buy a computer back in 2005 with an Amd cpu is well....stupid. It goes back to what people are saying today when someone decides to get a computer with an i7. There is no need to buy a computer with an i7 when a P2 965 is more then capable of handling what people use a computer for yet there are some people where the performance of an i7 is worth it. Back in 05 a P4 too was more then capable of handling what people used a computer for.

If you are buying an i5-750 you aren't going to be better off buying a PhII 965 and the cost of an i7-860 is not that much more than a PhII 965 and you get a nice little performance edge for your money.

So it isn't outrageous for a consumer to buy an i5-750 or an i7-860, but beyond those chips from Intel, unless you have specialised needs, then the justification becomes almost impossible to make.

 

[someguy7]

That is not what we where discussing qurious. The stupid part was the entire consumer doing research and not just buying the Intel name thing. Sub out the stupid for uninformed.

If we are going to bring up the entire chip is capable thing then everything the discussion is pointless. Basically every machine in stores today is capable of handling what people use a computer for. Even the single core sempron.

 

[JAYDEEJOHN]

Lets not forget the impact on the OEMs here, as there was no incentive, actually negative incentive to buy from AMD. What exactly did this do to their pricing? Anyone have pricing for Dell or HP? Not channel

 

[xtc28]

OMG This is pretty darn sad!!!! Intel did it! Get over it! This is such a flabergastltingly stupid argument. I dont care who manufactures my chips as long as they perform well!!!!!!!!!!!!!!!!!!!!!
Intel! AMD! CYRIX! VIA! THEY ARE ALL GOOD JUST GET MORE!!!!!!!!😉

 

[verndewd]

You shouldn't confuse my liking to prod those suffering from massive amounts of self-delusion, with fanboyism.

Until I bought my i7-860 on the 19th of December 2009, I had been running with an AMD64 3000+ for almost 4 years.

My comments are directed at the crazies who think they are fighting some kind of Holy War(in semiconductors of all things, Bloody Hell ), and will never own any other computer than one powered by a green label.

really looked like Intel fanaticism for a moment. I have my moments of paying tithes to Intel for how well they do in design, so to speak. been accused of fanboyism for it as well , even though I own a phenom 2 rig.

 

[verndewd]

Funniest thing is that the blue label CPU is greener (enviormentaly) than the green label CPU......

you know that is just due to the fact that their solder is lead free right? you cant use any less harmfull chemicals it lithography and some of those acids are extremely deadly. The problem with current solder tech is tin whiskers id be less green too knowing how destructive that problem can be.

 

[fazers_on_stun]

Fanbois of course. They seem to forget the whole pre conroe era i.e. benchmarks significance, market share, ASP, capacity constraints etc., and what they do remember they spin it around. BTW there is spinning on the other side too but the couple of rabid Amd fanbois that are in here make it a lot more fun and actually easier to disprove.

FYI, the Liebeler article stated:

The FTC alleges that when Intel learned that an OEM was considering building a computer with AMD chips that it threatened to "penalize" the OEM by suspending its delivery of Intel microprocessors. Handing over business to a competitor is an odd response to a competitive threat, if what the FTC alleges is true. This "threat," coupled with the FTC's claim that AMD processors were superior to Intel processors, represented a golden opportunity for AMD to increase its market share and expand its capacity (it (AMD) claimed publicly that it was capacity-constrained and sold all processors it manufactured). Yet, the FTC uses these facts as the basis for its complaint that Intel somehow excluded AMD from market expansion.

I'd like to see where Liebeler got his info that AMD itself admitted it was capacity constrained at the time - would go a long ways towards quieting some of the AMD fanbois here who claim otherwise - right, Jay??

 

[JAYDEEJOHN]

As it should be, give credit where credit is due.
fazers n I can go round and round, but we both know better, besides, hes funnier than I am heheh, and a good read

 

[fazers_on_stun]

or hide behind mysterious lost emails.

LOL - good point. But Intel actually coughed up those missing emails eventually. OTOH, AMD apparently never bothered with preserving theirs until well after filing their initial lawsuit. That's one of the points Intel brought up in their countersuit, which now has been settled.

 

[JAYDEEJOHN]

Well, as I said, if AMD had to give their cpus away to those OEMs just to get their foot in the door due to Intesl actions, does it matter?
And again, context man, context. When, for how long? How much? We know what Intel did, and now we hear these claims, which is generated by whom?
Huffy can go Puffy and comb her hair, afaic

 

[qurious69ss]

FYI, the Liebeler article stated:

The FTC alleges that when Intel learned that an OEM was considering building a computer with AMD chips that it threatened to "penalize" the OEM by suspending its delivery of Intel microprocessors. Handing over business to a competitor is an odd response to a competitive threat, if what the FTC alleges is true. This "threat," coupled with the FTC's claim that AMD processors were superior to Intel processors, represented a golden opportunity for AMD to increase its market share and expand its capacity (it (AMD) claimed publicly that it was capacity-constrained and sold all processors it manufactured). Yet, the FTC uses these facts as the basis for its complaint that Intel somehow excluded AMD from market expansion.

I'd like to see where Liebeler got his info that AMD itself admitted it was capacity constrained at the time - would go a long ways towards quieting some of the AMD fanbois here who claim otherwise - right, Jay??

A good read indeed, thanks.

 

[qurious69ss]

Not sure if Amd was giving their chips away, but I do remember H. Ruiz talking about breaking the monopoly by reaching 30% market share at whatever cost and sequentially they slashed their prices by >50%. Not sure how they would of reached that number since they were supposedly capacity constrained and if they were selling every chip they made then why would they have to take such deep price cuts. Anyways I wonder if Amd felt in 2006 that they could support 30% of the market (with help from charter) and was willing to sacrifice margins to get there, unfortunately for them conroe ruined their plans and they sputtered at 22%.

 

[JAYDEEJOHN]

This involves AMD, Intel and the OEMs. Does this mean more than channel pricing?

 

[fazers_on_stun]

Not sure if Amd was giving their chips away, but I do remember H. Ruiz talking about breaking the monopoly by reaching 30% market share at whatever cost and sequentially they slashed their prices by >50%. Not sure how they would of reached that number since they were supposedly capacity constrained and if they were selling every chip they made then why would they have to take such deep price cuts. Anyways I wonder if Amd felt in 2006 that they could support 30% of the market (with help from charter) and was willing to sacrifice margins to get there, unfortunately for them conroe ruined their plans and they sputtered at 22%.

Yes, and to settle Jay's hash, Hector himself referred to AMD's capacity constraint :

That said, AMD may very well face some supply challenges in the consumer space this year, as demand for high-performance products increases. "It is very likely that this year, if the market does behave as we hope it does, that we will be challenged in a capacity situation." The numbers of servers that AMD must support, even with its growing market, is small enough, Ruiz said, not to give the company any challenges there. But to be a player in the commercial space, where customer quantity may be low but supply quantity is much higher, the company may need to make some tradeoffs to ensure "we will always meet the needs of those people that are signing up on the commercial space.

"If we find a place where we might have a challenge in meeting some of the demands," Ruiz concluded, "[it] might be in some segments of the consumer space. For example, a lot of the products that we use to serve the very high end of the desktop market might be products that might be better used and redirected to serve segments of commercial or server. In that sense, we might be tight in those regards. But it will be a year in which the balance between demand and capacity will be carefully managed quarter by quarter."

Of course, this was in March 2006, not 2004, but after landing Dell and then buying ATI instead of building more fabs, it's obvious that the "capacity will be carefully managed" idea went out the window.

 

[fazers_on_stun]

And from AMD's own complaint , filed June 2005:

36. Intel’s misconduct is global. It has targeted both U.S. and offshore customers at
all levels to prevent AMD from building market share anywhere, with the goal of keeping
AMD small and keeping Intel’s customers dependent on Intel for very substantial amounts of
product. In this way, OEMs remain vulnerable to continual threats of Intel retaliation, AMD
remains capacity-constrained, the OEMs remain Intel-dependent, and Intel thereby perpetuates
its economic hold over them, allowing it to continue to demand that customers curtail their
dealings with AMD. And the cycle repeats itself: by unlawfully exploiting its existing market
share, Intel is impeding competitive growth of AMD, thereby laying foundation for the next
round of foreclosing actions with the effect that AMD’s ability to benefit from its current
technological advances is curtailed to the harm of potential customers and consumers.

Methinks the issue should be settled by now 😀.

 

[verndewd]

And from AMD's own complaint , filed June 2005:

36. Intel’s misconduct is global. It has targeted both U.S. and offshore customers at
all levels to prevent AMD from building market share anywhere, with the goal of keeping
AMD small and keeping Intel’s customers dependent on Intel for very substantial amounts of
product. In this way, OEMs remain vulnerable to continual threats of Intel retaliation, AMD
remains capacity-constrained, the OEMs remain Intel-dependent, and Intel thereby perpetuates
its economic hold over them, allowing it to continue to demand that customers curtail their
dealings with AMD. And the cycle repeats itself: by unlawfully exploiting its existing market
share, Intel is impeding competitive growth of AMD, thereby laying foundation for the next
round of foreclosing actions with the effect that AMD’s ability to benefit from its current
technological advances is curtailed to the harm of potential customers and consumers.

Methinks the issue should be settled by now 😀.

2005 was 90nm with other OEM's coming on board at 45nm it tells a different story. I think I approximated capacity in products in this or another thread, at 45nm they can produce alot of chips. So what was said in 2005 may not apply today since 2 nodes have gone by and supply has been double twice. And now with chartered/tsmc? in tow they have 11 fabs albeit aged in some respect on the chartered side but chartered/tsmc does have a couple premium fabs.

And with GF contracting a certain percentage of ATI chips it doesnt say much for their capacity being too constrained. But , There is the multi core server focus which are huge beasties , that being the main market for AMD most wafers will sevice server contracts, still with the obligation to make ATI chips it means they have the capacity and the bulk process.

Interesting days for AMD

I believe also that the top levels of either company are less fanbois than the toads on the street.
in so many ways it actually looks like there is an unspoken partnership and courts are only brought in when the friendship isnt going so well, like a marriage counselor.

my 2 pence

 

[JAYDEEJOHN]

Per your second link, this was complaints, so there must be reasons why they think theyve been capacity restrained?
Context man context

 

[fazers_on_stun]

Per your second link, this was complaints, so there must be reasons why they think theyve been capacity restrained?
Context man context

IIRC AMD stock was selling around $40 a share back then. So all AMD had to do was issue another 100M common shares (<20% increase in shares outstanding) and that would have paid for another fab - ~$4B or less in 2004-05).

Seriously, does it make any business sense to not increase product availability when (1) you're selling every CPU you make and (2) you have the superior product? Even a 6-yr-old lemonade stand kid knows that when you're running low on a hot summer day, start squeezing more lemons

 

[verndewd]

IIRC AMD stock was selling around $40 a share back then. So all AMD had to do was issue another 100M common shares (<20% increase in shares outstanding) and that would have paid for another fab - ~$4B or less in 2004-05).

Seriously, does it make any business sense to not increase product availability when (1) you're selling every CPU you make and (2) you have the superior product? Even a 6-yr-old lemonade stand kid knows that when you're running low on a hot summer day, start squeezing more lemons

:lol: :lol: :lol:

regardless of admission I am taking that as pun intended. 😀 If the shoe fits and all that.

 

[JAYDEEJOHN]

Well, anylist day was after C2D, and it is prettied up, was this after the price drops as well? In other words, keeping it all in context, it was late in Intels game here, theyve already cheated their way to where they needed to be, they couldnt stop the competitions momentum despite their activities, but theyve skewed the pricing margins to the point the competition has become capacity constrained and have a inferior product, and cutting prices wont hold marketshare.
Or, its as simple as some think. Problem is, the FTC doesnt think its that easy

 

[BadTrip]

Well, anylist day was after C2D, and it is prettied up, was this after the price drops as well? In other words, keeping it all in context, it was late in Intels game here, theyve already cheated their way to where they needed to be, they couldnt stop the competitions momentum despite their activities, but theyve skewed the pricing margins to the point the competition has become capacity constrained and have a inferior product, and cutting prices wont hold marketshare.
Or, its as simple as some think. Problem is, the FTC doesnt think its that easy

What you FAIL to understand is: What the FTC thinks and what the FTC proves in court are two totally different things.

 

[JAYDEEJOHN]

No, but as some think here, the fat lady has already sung. It hasnt even started yet, neither has the NY filings.
To pretend its in the bag because of this out of context thing or that, it goes both ways here, as a few were crying "those Intel statements were out of context", but the difference is, its what the actions are/were, and as Ive pointed out, no one here or on the internet has those actions/facts, and yes, Im looking forwards to see what Intel did and didnt do, and what perception those actions, if any, did to AMDs bottom line, its ability to function moving forwards etc.
Thats context, not quoting from nowheres about something out of context, not addressing this issue, but making it look good to investors in a financial statement.
Just like Great Leader at nVidia is spouting about its 40nm production, and mentioning Fermi right along with it, well, Fermi isnt in mass production yet, but theres tons of crap G92 type low end cards at 40nm coming out

 

[verndewd]

actually whined really loud jd, i dont call otellinis whining , singing.
Paul.O " waahhh i dont want to write a check"

 

[jimmysmitty]

2005 was 90nm with other OEM's coming on board at 45nm it tells a different story. I think I approximated capacity in products in this or another thread, at 45nm they can produce alot of chips. So what was said in 2005 may not apply today since 2 nodes have gone by and supply has been double twice. And now with chartered/tsmc? in tow they have 11 fabs albeit aged in some respect on the chartered side but chartered/tsmc does have a couple premium fabs.

And with GF contracting a certain percentage of ATI chips it doesnt say much for their capacity being too constrained. But , There is the multi core server focus which are huge beasties , that being the main market for AMD most wafers will sevice server contracts, still with the obligation to make ATI chips it means they have the capacity and the bulk process.

Interesting days for AMD

I believe also that the top levels of either company are less fanbois than the toads on the street.
in so many ways it actually looks like there is an unspoken partnership and courts are only brought in when the friendship isnt going so well, like a marriage counselor.

my 2 pence

Not to mention that now they do have more FABs to actually utilize but the FTC is looking at the period in which AMD was talking about, not current.

Currently Intel had Core 2 that whipped Athlon64 all over the place unless it was a 4P and up server. Now Intel has Core i7 for the servers. Add to that Phenom released pretty horribly in the consumer market and even worse in the server market where they profit more (they had a stop ship and ended up trying to recall all shipped Opterons) that together can cause some nasty backlash with the debt from purchasing ATI and as well a shrink to market share.

After that Phenom II hit and it was better and has been. If Phenom was out on time and like Phenom II I doubt this would be going on but it wasn't and I am not 100% convinced it was all intels fault if AMD was having trouble meeting demands and selling every chip they could make at the time.

To me it looks like AMD mad a lot of bad choices, couldn't fill the needs and they needs were met by Intel. AMD complains and it becomes a bigger issue.

Its funny that they state they were capacity constrained and still say because of that Intel met the need the OEMs needed and caused AMD to not be able to get more sales.

I doubt a OEM would take an IOU since the rate of CPU change and price change is so fast.

But still, with more and more info coming together it looks like things might come out differently than people expect.