More builders sound off about the price war

[wolverinero79]

I think the small businesses (the ma and pa shops) are having the greatest difficulty because they can't buy huge quantity of chips for discounts.

When they have the product sitting there for 6 months and it doesn't sell, then they have to sell it at a lower price due to the falling chip prices to be at least comparable with other businesses. This leads to huge losses or lower profit margins for the small businesses.

I think you found the main issue the channel has with the price war. When Mom and Pop stores get chips for the first time, they usually are more expensive than HP, etc. for two reasons. First, the chips cost them more since they can't buy huge quantities. Secondly, regardless of a price war, chip prices decrease and consumers know it. When this happens the stores are forced to decrease a little. If you were to have extreme price deflation (like a drop every 2 weeks), this could absolutely destroy the little shops. They would end up way over pricing at the beginning, or holding the price steady while actual cost for new chips plummeted. Either way, they'd struggle.

 

[heartview]

I think you found the main issue the channel has with the price war. When Mom and Pop stores get chips for the first time, they usually are more expensive than HP, etc. for two reasons. First, the chips cost them more since they can't buy huge quantities. Secondly, regardless of a price war, chip prices decrease and consumers know it. When this happens the stores are forced to decrease a little. If you were to have extreme price deflation (like a drop every 2 weeks), this could absolutely destroy the little shops. They would end up way over pricing at the beginning, or holding the price steady while actual cost for new chips plummeted. Either way, they'd struggle.

Again, in nearly every other sector of the economy this same thing happens ALL THE TIME. The mom and pop shops have several advantages that can work to their favor to, not the least of which is lower overhead. They can also offer more personalized support, which some people desperately want and need, but can't get, from the bigger PC vendors. They will learn to adapt or exit the market. Gateway was a mom and pop shop at the beginning and so was Dell, but they seem to be doing ok now.

The easiest way to fail in the PC world is to stick with "business as usual" for a motto.

 

[BaronMatrix]

I think you found the main issue the channel has with the price war. When Mom and Pop stores get chips for the first time, they usually are more expensive than HP, etc. for two reasons. First, the chips cost them more since they can't buy huge quantities. Secondly, regardless of a price war, chip prices decrease and consumers know it. When this happens the stores are forced to decrease a little. If you were to have extreme price deflation (like a drop every 2 weeks), this could absolutely destroy the little shops. They would end up way over pricing at the beginning, or holding the price steady while actual cost for new chips plummeted. Either way, they'd struggle.

Again, in nearly every other sector of the economy this same thing happens ALL THE TIME. The mom and pop shops have several advantages that can work to their favor to, not the least of which is lower overhead. They can also offer more personalized support, which some people desperately want and need, but can't get, from the bigger PC vendors. They will learn to adapt or exit the market. Gateway was a mom and pop shop at the beginning and so was Dell, but they seem to be doing ok now.

The easiest way to fail in the PC world is to stick with "business as usual" for a motto.

They aren't the only ones.

Despite brisk sales in the fourth quarter, low prices and lower margins on flat-panel TVs are forcing Circuit to trim its store count

From Anand.

 

[turpit]

I think you found the main issue the channel has with the price war. When Mom and Pop stores get chips for the first time, they usually are more expensive than HP, etc. for two reasons. First, the chips cost them more since they can't buy huge quantities. Secondly, regardless of a price war, chip prices decrease and consumers know it. When this happens the stores are forced to decrease a little. If you were to have extreme price deflation (like a drop every 2 weeks), this could absolutely destroy the little shops. They would end up way over pricing at the beginning, or holding the price steady while actual cost for new chips plummeted. Either way, they'd struggle.

Again, in nearly every other sector of the economy this same thing happens ALL THE TIME. The mom and pop shops have several advantages that can work to their favor to, not the least of which is lower overhead. They can also offer more personalized support, which some people desperately want and need, but can't get, from the bigger PC vendors. They will learn to adapt or exit the market. Gateway was a mom and pop shop at the beginning and so was Dell, but they seem to be doing ok now.

The easiest way to fail in the PC world is to stick with "business as usual" for a motto.

They aren't the only ones.

Despite brisk sales in the fourth quarter, low prices and lower margins on flat-panel TVs are forcing Circuit to trim its store count

From Anand.


Yeah, even if it is from anand, Id wave the BS flag on that one. IMO ridiculous pricing is driving business to etailers. Those folks are insane, marking flatpanels up hundreds over what youd pay online.

 

[CaptRobertApril]

They aren't the only ones.

Despite brisk sales in the fourth quarter, low prices and lower margins on flat-panel TVs are forcing Circuit to trim its store count

From Anand.

From CBC News

Circuit City is cutting 290 jobs in Canada as part of a restructuring that will see the U.S.-based electronics retailer close 62 stores in this country and reduce Canadian head office staff in Barrie, Ont., by 17 per cent.

Closings across North America, which include seven U.S. superstores and a distribution centre in Louisville, Ky, will take place over the next six months at an expected total cost of US$85 million to US$105 million, all to be incurred in the current financial quarter.

Ouch!

 

[BaronMatrix]

Yeah, even if it is from anand, Id wave the BS flag on that one. IMO ridiculous pricing is driving business to etailers. Those folks are insane, marking flatpanels up hundreds over what youd pay online.

What was that about changing the subject?


This just goes to show that even large retailers can lose money from "uncontrolled" price drops.

 

[epsilon84]

I'm gonna have to check with my local community college and see if they offer courses in baronomics. What you said makes no sense. As stated by mpjesse above, system prices have not changed drastically. OEMs are merely putting the difference of lower costs in their pocket.

Then you haven't been to Best Buy lately. With all other costs basically the same, PCs are HUNDREDS LESS than lest year.

I wasn't aware that $100 - $200 CPUs did not exist last year?

Were low end A64s, Semprons, Celerons, PD-805s etc not available for the same prices this time last year?

There has ALWAYS been CPUs for every price sector - and it's no different today.

Budget/mainstream CPUs always dominate sales, and budget/mainstream CPUs are the SAME PRICE today as they were a year ago. $100 is $100, the only difference is today you can get a dual core instead of single core for that price. It's called PROGRESS.

 

[BaronMatrix]

I'm gonna have to check with my local community college and see if they offer courses in baronomics. What you said makes no sense. As stated by mpjesse above, system prices have not changed drastically. OEMs are merely putting the difference of lower costs in their pocket.

Then you haven't been to Best Buy lately. With all other costs basically the same, PCs are HUNDREDS LESS than lest year.

I wasn't aware that $100 - $200 CPUs did not exist last year?

Were low end A64s, Semprons, Celerons, PD-805s etc not available for the same prices this time last year?

There has ALWAYS been CPUs for every price sector - and it's no different today.

Budget/mainstream CPUs always dominate sales, and budget/mainstream CPUs are the SAME PRICE today as they were a year ago. $100 is $100, the only difference is today you can get a dual core instead of single core for that price. It's called PROGRESS.

Right, find a mainstream CPU for more than $600. Are you just programmed to argue about this? I have posted several stories about this from reputable sites quoting reputable dealers. They all say the same thing. You have to pass the savings on to the customer cause if they find out, there will be hell to pay.

But you just keep living this lie.

 

[crackdlr]

ok just to throw my hat in the ring and to clarify some things:

the article @ crn.com is written by an idiot. there are 2 subject in question and the author doesn't bother separating them into different ideas

A) supply to the channel by amd has sucked in the past....to dell and other major manufucturers HP, toshiba - fat cats - so waa waa i can't charge $5,000 for a pc that cost me $800 in parts

B)ya the rapidly falling prices will hurt mom and pop shops, probably the major manufacturers too since a computer doesn't get built, then paid for, then reach your house in the span of a day or two, prolly not even a week or two... whose fault?? UPDATE YOUR BUSINESS PLAN

what the krap!! - im an economics major and we learned about inventory costs and just in time inventory/pricing in 30 minutes of my first class

if "mom and pop" don't stay educated and adapt they will be forced out the market by more efficient computer makers. here's an idea - DONT BUILD A COMPUTER until someone actually ORDERS ONE 8O

if you HAVE TO keep inventory on hand so you can build a computer in 20 minutes - buy the processors that you think your customers will order! not 50 of each kind, from each chip maker, at each different speeds. Get this equation right and you will make a BOAT-Load of cash, you get it wrong.... hope you weren't too attached to your FICO credit score

 

[crackdlr]

OMG -i'm having reply overload - sorry turpit

BARON'S right on this one....

circuit city has to pay for shipping of tv's to their store, pay to unload it, pay for rent to keep it displayed ina store, pay for power to keep the lights on, pay for insurance, pay for advertising, pay for some snot nosed kid to sell it to you... ya... NO BoolShat

what do the online store's have to do? make sure they get the right shipping address

more and more people rather wait a few days for shipping than pay 50% markup to a big box retailer for a tv, major appliance or a computer for that matter

here's another example "blockbuster vs. netflicks" talk amongst yourselves -im forklempt
...the internet is changing everything

 

[crackdlr]

@ verndewd

i can tell you probably have a lot of money tied up in AMD stock
don't worry - you buy these things and hold onto them for the long run (at least a year..... right....??) with ATI releasing their gpu's, the green-team will see some additional revenue, then barc drops in a coupla months, even more revenues
it looks bad right now cause INTEL is trying use core2duo as a choke hold to make AMD pass-out, the lower intel prices their chips, the lower AMD has to go price wise.... temporary my friend.... they should be pumping massive $$$ into R&D to make sure Barcelona works correctly (faster than C2D)otherwise they'll have to take the fight to 45nm

so worse-case you'll have to keep those stocks for another year and a half?
if it drops to single-digits i would buy more of their stock... no- seriously.

 

[turpit]

OMG -i'm having reply overload - sorry turpit

BARON'S right on this one....

circuit city has to pay for shipping of tv's to their store, pay to unload it, pay for rent to keep it displayed ina store, pay for power to keep the lights on, pay for insurance, pay for advertising, pay for some snot nosed kid to sell it to you... ya... NO BoolShat

what do the online store's have to do? make sure they get the right shipping address

more and more people rather wait a few days for shipping than pay 50% markup to a big box retailer for a tv, major appliance or a computer for that matter

here's another example "blockbuster vs. netflicks" talk amongst yourselves -im forklempt
...the internet is changing everything

I agree online shopping is changing things, and I agree retail outlets overhead is higher than etailers, however, I disagree as to the level of danger retailers like CC claim to be facing.

They have a lot more flexability than you think. When confronted with online prices for identical products, they will lower prices to within $50. While visiting family for the holidays last year, I got them to knock $400 of a LCD TV. They would not have gone lower than they could afford.

And believe me, their managment could easily afford to trim their own salaries a little without having to hurt the company.



CC Officers saleries

 

[function9]

OMG -i'm having reply overload - sorry turpit

BARON'S right on this one....

circuit city has to pay for shipping of tv's to their store, pay to unload it, pay for rent to keep it displayed ina store, pay for power to keep the lights on, pay for insurance, pay for advertising, pay for some snot nosed kid to sell it to you... ya... NO BoolShat

what do the online store's have to do? make sure they get the right shipping address

more and more people rather wait a few days for shipping than pay 50% markup to a big box retailer for a tv, major appliance or a computer for that matter

here's another example "blockbuster vs. netflicks" talk amongst yourselves -im forklempt
...the internet is changing everything

I think people are getting tired of the attitude and hassles of the retail chains too. The whole process from start to after purchase support is a nightmare. You walk in the door and have some little retard with a nametag on his shirt jumping on your back to sell you something. Pay the inflated price, get your purchase home to find out something is wrong with it. Good luck with a return/refund because you have to jump through a half dozen hoops to get it, while singing a showtune.

Some stores have seen the writing on the wall and adapted (Microcenter, about the only local place I'll shop at), others (and sadly the majority) think they can still piss on the customers and expect their business to flourish. I won't shed a tear for any of these chains that have to close up shop.

 

[heartview]

They aren't the only ones.

Despite brisk sales in the fourth quarter, low prices and lower margins on flat-panel TVs are forcing Circuit to trim its store count

From Anand.

Ok, but this just proves my point, that it happens all the time all over the economy. THIS IS NOTHING NEW. So why are we treating it like it is a bad thing?

One reason to lower price is to raise volume. There is a tradeoff, but I'm sure both AMD and Intel want to sell their processors in volume. They have to, really. And the more volume they sell the harder it is for the other guy to do the same.

The #1 thing affecting PC companies right now is NOT the price of CPU's, it is the RATE at which the prices of components like CPU's change. And that factor happens no matter which direction the prices are headed. As prices fall they stand to lose money on their inventory, as prices go up they can make money on their inventory. A fact of life and hardly something to cry foul over.

Look at oil and diamond prices. They are manipulated all the time by the people that supply them. I'm sure nobody wants that same sort of control and manipulation in the CPU market.

 

[BaronMatrix]

They aren't the only ones.

Despite brisk sales in the fourth quarter, low prices and lower margins on flat-panel TVs are forcing Circuit to trim its store count

From Anand.

Ok, but this just proves my point, that it happens all the time all over the economy. THIS IS NOTHING NEW. So why are we treating it like it is a bad thing?

One reason to lower price is to raise volume. There is a tradeoff, but I'm sure both AMD and Intel want to sell their processors in volume. They have to, really. And the more volume they sell the harder it is for the other guy to do the same.

The #1 thing affecting PC companies right now is NOT the price of CPU's, it is the RATE at which the prices of components like CPU's change. And that factor happens no matter which direction the prices are headed. As prices fall they stand to lose money on their inventory, as prices go up they can make money on their inventory. A fact of life and hardly something to cry foul over.

Look at oil and diamond prices. They are manipulated all the time by the people that supply them. I'm sure nobody wants that same sort of control and manipulation in the CPU market.


The difference is that the PC industry carries a large amount of the economy on its NASDAQ back. When something happens it affects the entire market.
How can anyone grow if they continually drop prices?

Answer: They can't.

Fortunately it looks liek AMD is pricing down the X2 in order to intro Kuma, Agena, and Barcelona/Budapest at last year's prices. if it does what they say then Intel will be stuck in the middle of X2 and Kuma.

Then tey will have to drp prices more. It is unfortunate but it looks like AMD is going for Intel's jugular. I guess if you live by the sword......

 

[flasher702]

We've got to earn our resellers' trust and desire to use AMD products again," said Stephen DiFranco, corporate vice president of AMD's Global Go-To-Market program. "We lost some market share in the channel when we didn't have product to give the channel and we want to get it back."

well yeah intel is ahead right now.
amd was the king about a year ago and the year before that.

now its intels turn.
amd will probably be the king again, the intel and so forth.

the builders know this too. :?

I get really tired of hearing these kind of excuses. It shows complete disregard for what is actually going on. For starters AMD was never on top. Never happened. Show me a time in any market where AMD's share was bigger than Intels. Which chip "enthusiasts" precieve to be the fastest has diddly squat to do with the market so if we could discuss the topic at hand instead of bringing up this tired and uninformed defence of Intel's allegedly anti-competetive business practices please? It is not Intel's "turn" by any measure of marketplace performance. They maintained market dominance with an inferior product, and they are still peddling that same inferior product to remain competetive in the low and mid-range while waging a price war on the high-end as well. The OP basically alleges that intel's business practices are anti-competetive and may actually hurt the entire industry including consumers. If you want to argue against that feel free, but please do so intelligently and never bring up this ridiculus and clearly incorrect argument again.

More on topic, the unnamed system builder didn't go into much detail, but I'm assuming that he may be complaining about having to devalue his current inventory when there are price cuts. For a large OEM like dell this isn't such a big deal as they have sophisticated supply infrastructure, better communication, and devaluing inventory simply doesn't hurt their bottom line as much. Other than that cheaper parts generally mean more competition and lower margins on less expensive end products. The computer retail market is VERY different from other industries (steel production has got to be one of the worst examples for a parallel). Understanding of and discussion of the specific challenges facing the industry are in order, applying very basic levels of understanding of capitalistic theories without considering the details is reckless.

For now the price war is good for consumers. It makes the market a bit more volitile which is both good and bad for the various players (some will do well, some won't change fast enough and will be hurt). But if it goes on for too long it starts to hurt too many companies and could actually hurt competition which would hurt consumers.

Capitalism only works well under VERY healthy economic conditions with lots of competition where many different companies are all making healthy amounts of profit. Intel isn't just hurting their own profit margins, and they aren't just hurting AMD, this price war affects the entire industry. Wether the effect is overall good or bad is debateable, but saying that it's just business as ussual is pure ignorance.

 

[heartview]

I think when people say a company is "on top" they are talking about technology and not market share.

As for feeling bad for either company, I don't. I don't feel bad for the "poor PC makers" since they make a buck any way they can, too. I'm more than a little jaded toward publicly traded companies because they are not generally acting for the benefit of consumers, but instead are focusing on their shareholders. Which is understandable, don't get me wrong. I just don't feel sorry for them one bit because of that fact.

It would be great if the companies that make the products we love could also be something we can be proud of. But that is so seldom the case that it's hard to even look for these days.

I guess all I'm saying is that the market will decide the better business, not the better product. Just like it always has in the past. There will always be complainers no matter how good or bad things are. What is good for one company will be bad for another, and that is just how it goes.

Our only vote that counts is to buy products from the companies we believe in and not buy products from those we don't.

 

[BaronMatrix]

Capitalism only works well under VERY healthy economic conditions with lots of competition where many different companies are all making healthy amounts of profit. Intel isn't just hurting their own profit margins, and they aren't just hurting AMD, this price war affects the entire industry. Wether the effect is overall good or bad is debateable, but saying that it's just business as ussual is pure ignorance.

We agree on at least one thing.

 

[flasher702]

I think the small businesses (the ma and pa shops) are having the greatest difficulty because they can't buy huge quantity of chips for discounts.

When they have the product sitting there for 6 months and it doesn't sell, then they have to sell it at a lower price due to the falling chip prices to be at least comparable with other businesses. This leads to huge losses or lower profit margins for the small businesses.

True enough, but how is this the fault of Intel or AMD? In ANY other sector of the economy when is the supplier at fault for lowering their prices? The logic behind this whole thread just doesn't make sense.

Anytime someone buys components, assembles them, and then sells the finished product, they will ALWAYS run the risk of component prices lowering after they buy them. This is life in the business world.

And I find it endlessly funny that people argue that a world without AMD would mean that Intel would keep prices artificially high, and yet those same people are actually ASKING that Intel and AMD do just that now.

/boggle

You are completely wrong about a couple of things here.

Not all inventory devalues the way computers do. A new 2007 model-year car is worth the exactly the same in november of 2007 as it was in november of 2006. In fact, most other industries the value of inventory generally goes UP over time in a fairly predictable manner with price drops being fairly rare and predictable well in advance: gold, lumber, steel, electrical production capacity. Some products, such as food, have shelf lifes that is somewhat similar to the way computers devalue. When dealing with inventory that devalues the larger and more diverse the company is the less of a risk they take. Computers devalue pretty rapidly and in this price war this devaluation has been excellerated while reducing profit margins at the same time and it is the smaller companies that take the brunt of the pain.

A world without a strong competitor to Intel IS a world with outrageous prices. Either you haven't been around for very long or you have no memory. Prior to the Athalon XPs with Performance Ratings instead of Ghz ratings Intel charged HUGE price premiums to get that "Intel Inside" sticker on your computer. When AMD had some more competative products with better marketing Intel brought their prices down slightly but used brute force to maintain market dominance and high prices and this continued even when AMD started to nab performance crowns from time to time. It wasn't until Intel started loosing market share that they actually lowered their prices. There was a time when you could make an AMD system with a VIA chipset with 90% of the performance and stability of an Intel system (and Intel wasn't exactly rock-solid either if you were running Win98 or early WinXP) for less than HALF the price. Intel wants that kind of market dominiance back and they seem to be willing to take a few bad quarters to get it, but they are plunging an entire industry into uncertainty in the process.

 

[BaronMatrix]

I think the small businesses (the ma and pa shops) are having the greatest difficulty because they can't buy huge quantity of chips for discounts.

When they have the product sitting there for 6 months and it doesn't sell, then they have to sell it at a lower price due to the falling chip prices to be at least comparable with other businesses. This leads to huge losses or lower profit margins for the small businesses.

True enough, but how is this the fault of Intel or AMD? In ANY other sector of the economy when is the supplier at fault for lowering their prices? The logic behind this whole thread just doesn't make sense.

Anytime someone buys components, assembles them, and then sells the finished product, they will ALWAYS run the risk of component prices lowering after they buy them. This is life in the business world.

And I find it endlessly funny that people argue that a world without AMD would mean that Intel would keep prices artificially high, and yet those same people are actually ASKING that Intel and AMD do just that now.

/boggle

You are completely wrong about a couple of things here.

Not all inventory devalues the way computers do. A new 2007 model-year car is worth the exactly the same in november of 2007 as it was in november of 2006. In fact, most other industries the value of inventory generally goes UP over time in a fairly predictable manner with price drops being fairly rare and predictable well in advance: gold, lumber, steel, electrical production capacity. Some products, such as food, have shelf lifes that is somewhat similar to the way computers devalue. When dealing with inventory that devalues the larger and more diverse the company is the less of a risk they take. Computers devalue pretty rapidly and in this price war this devaluation has been excellerated while reducing profit margins at the same time and it is the smaller companies that take the brunt of the pain.

A world without a strong competitor to Intel IS a world with outrageous prices. Either you haven't been around for very long or you have no memory. Prior to the Athalon XPs with Performance Ratings instead of Ghz ratings Intel charged HUGE price premiums to get that "Intel Inside" sticker on your computer. When AMD had some more competative products with better marketing Intel brought their prices down slightly but used brute force to maintain market dominance and high prices and this continued even when AMD started to nab performance crowns from time to time. It wasn't until Intel started loosing market share that they actually lowered their prices. There was a time when you could make an AMD system with a VIA chipset with 90% of the performance and stability of an Intel system (and Intel wasn't exactly rock-solid either if you were running Win98 or early WinXP) for less than HALF the price. Intel wants that kind of market dominiance back and they seem to be willing to take a few bad quarters to get it, but they are plunging an entire industry into uncertainty in the process.


I think we're both wasing our breath. As long as Intel is involved peoples IQ will go down.
The last time I postd abut this "war" it was talked about by the CEO of VooDooPC and peple said he just wants to keep his prices high, ut more of ther costs are the custom-construction and parts not the CPU price.

ANny retailer has to pass the savings onto the customer. If everythng else stays the same they are losing whatever the difference is CPU prices are.

Someone actually said that these companies are just pocketing the money but I visit stores to check prices and I have seen a steady decline in prices for PCs in general for the last 4+ months.

 

[flasher702]

Our only vote that counts is to buy products from the companies we believe in and not buy products from those we don't.

Our votes don't count. Dell's vote counts. HP's vote counts. Lenova's vote counts. What Chip you and I buy counts for nothing. You buy one chip at a time, Dell buys Millions at a time. Newegg sells thousands of CPUs a quarter, even Apple manages to sell hundreds of thousands.

In light of that discussion of market conditions and possible intervention on our behalf by governmental organizations is highly desirable.

 

[heartview]

Our only vote that counts is to buy products from the companies we believe in and not buy products from those we don't.

Our votes don't count. Dell's vote counts. HP's vote counts. Lenova's vote counts. What Chip you and I buy counts for nothing. You buy one chip at a time, Dell buys Millions at a time. Newegg sells thousands of CPUs a quarter, even Apple manages to sell hundreds of thousands.

In light of that discussion of market conditions and possible intervention on our behalf by governmental organizations is highly desirable.

I thought were were talking PC's in this thread and not just CPU's? What you buy is your vote, and I wasn't just talking about buying a CPU direct from a parts supplier. You go out and buy a Dell PC with an AMD processor and you are voting for AMD with Dell. What you are arguing is whether or not anyone is actually counting the ballots and for that there are no guarantees.

 

[flasher702]

They aren't the only ones.

Despite brisk sales in the fourth quarter, low prices and lower margins on flat-panel TVs are forcing Circuit to trim its store count

From Anand.

Ok, but this just proves my point, that it happens all the time all over the economy. THIS IS NOTHING NEW. So why are we treating it like it is a bad thing?

One reason to lower price is to raise volume. There is a tradeoff, but I'm sure both AMD and Intel want to sell their processors in volume. They have to, really. And the more volume they sell the harder it is for the other guy to do the same.

The #1 thing affecting PC companies right now is NOT the price of CPU's, it is the RATE at which the prices of components like CPU's change. And that factor happens no matter which direction the prices are headed. As prices fall they stand to lose money on their inventory, as prices go up they can make money on their inventory. A fact of life and hardly something to cry foul over.

Look at oil and diamond prices. They are manipulated all the time by the people that supply them. I'm sure nobody wants that same sort of control and manipulation in the CPU market.

I digital TV is hardly a drastically different market segment from a computer. It's still consumer electronics and it's just a giant monitor anyway. And, if you read some news, you'll notice that Large Displays are also having some stiff price competition and rapidly declining prices for about the past year and continueing on for at least a few quarters into the forseable future.. It's a very similar market under very similar conditions and it's having problems. If anything it proves the point of the OP of how overly-aggressive price competition and rapidly declining prices can have negative effects. Circuit City isn't even a mom-and-pop shop and they're having problems.

At this point you really beg the question: what would it take to convince you that there is at least potentially a problem here that deserves serious consideration? Mr. Dell himself has released similar statments about his company (although he focused more on bearocratic bloat and loss of market leadership as being the cause for their layoffs rather than falling ASPs).

Eventually personal computers may become a comodity and prices and profit margins will be quite low when they get there, but that time isn't today or anytime withing the next 5 years and it's quite possible they will become obsolete/unpopular first. Also, commodities have STABLE pricing, it's part of what makes a product able to be a comodity. Times are changing, but they aren't changing that fast (unless you have some kind of evidence to show otherwise, but Intel and AMD have roadmaps that extend several years into the future) so I don't think that can be used as blanket argument to dismiss the subject.

I mean, grab some cheap CPUs while you can if you need them, but for all our sake the market needs to stabalize.

 

[sirheck]

im not talking marketshare. never said anything about that.
im talking performance.

 

[heartview]

At this point you really beg the question: what would it take to convince you that there is at least potentially a problem here that deserves serious consideration?

Eventually personal computers may become a comodity and prices and profit margins will be quite low when they get there, but that time isn't today or anytime withing the next 5 years and it's quite possible they will become obsolete/unpopular first. Also, commodities have STABLE pricing, it's part of what makes a product able to be a comodity. Times are changing, but they aren't changing that fast (unless you have some kind of evidence to show otherwise, but Intel and AMD have roadmaps that extend several years into the future) so I don't think that can be used as blanket argument to dismiss the subject.

My point has never been that there isn't a problem, it's that the problem has always been there and always will be in a market economy. So why all the fuss now? Yes, there will be a shakeout and some companies will fold. I'm sure some people will lose their favorite brand and blame whomever they choose for the loss. Good companies have come and gone for many wrong reasons, but very, very few of them could ever be considered "innocent fodder" in the market wars.

It's as if many people in this thread are saying the entire blame falls on Intel and that AMD is completely innocent in all of this. Which is absurd to say the least. This is like saying it is all Microsoft's fault for why the market isn't split into equal shares of Windows, Linux, and Macintosh. It's not for many reasons and people have to stop thinking there are innocents here, because there are not.

I'm not so naive to think that both Intel and Microsoft are without "sin". They have both tried very hard to maintain monopolies and have done many shady things. But, I ask honestly, who hasn't? And why is it ok for one company to do it and not another? Because they have sales in the millions instead of billions that gives them a right? Not in my book.

Not trying to go biblical on you, I'm just trying to make a point. I'm just tired of the pity parties, I guess.