More builders sound off about the price war

[BaronMatrix]

WHile AMD is just getting the channel supply back up, builders are getting upset that the chip makers are maintaining their volatile pricing.

CRN has a blurb about it in the midst of good news from AMD.

One system builder who declined to be named said the battle between the two chip makers isn't helping his business.

Linkage!

 

[sirheck]

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. :?

 

[col-p-todd]

I don't think we as consumer really care about his business, as long as we can save money when buying cpu's or complete systems. His business will have to do with a smaller profit margin.

 

[the_vorlon]

WHile AMD is just getting the channel supply back up, builders are getting upset that the chip makers are maintaining their volatile pricing.

CRN has a blurb about it in the midst of good news from AMD.

One system builder who declined to be named said the battle between the two chip makers isn't helping his business.

Linkage!

Last year about this time an FX60 cost $1000+

Today I can buy better performance for just a bit over $200 (An E6400)

Better performance, $700+ cheaper, uses less power, overclocks massively...

Explain to me again why this is a bad thing?

 

[mpjesse]

WHile AMD is just getting the channel supply back up, builders are getting upset that the chip makers are maintaining their volatile pricing.

CRN has a blurb about it in the midst of good news from AMD.

One system builder who declined to be named said the battle between the two chip makers isn't helping his business.

Linkage!

Why would it help his business? Average prices for PC's haven't dropped. The OEM's are pocketing the difference in costs. I'm not really sure why Intel started this whole price war... they have a superior product and should be charging a premium for it. In my opinion they're cutting their noses off. But if their goal is to decimate AMD, I guess it makes sense. If AMD goes away or losses significant market share, Intel can charge whatever the hell they want. Just like the good 'ole days...

Anyways, Vista will help his PC sales.

 

[BaronMatrix]

WHile AMD is just getting the channel supply back up, builders are getting upset that the chip makers are maintaining their volatile pricing.

CRN has a blurb about it in the midst of good news from AMD.

One system builder who declined to be named said the battle between the two chip makers isn't helping his business.

Linkage!

Last year about this time an FX60 cost $1000+

Today I can buy better performance for just a bit over $200 (An E6400)

Better performance, $700+ cheaper, uses less power, overclocks massively...

Explain to me again why this is a bad thing?


Because now the system builder has to cut $700 from the price of a comparably configured system.

If these people go out of business it hurts the economy as more business has to be pushed towards larger builders which in turn causes shortages due to additional demand.
This has the tendency to raise prices even higher than the previous level.

You could also get a 4400+ for half that and 4200+/3800+ for even less with adequate performance.

In terms of gouging, the 965EE (spanked into NON-EXISTENCE by the E6300) has just been priced SLIGHTLY competitively to FX60 or even FX62.

Can you say suckers?

 

[turpit]

WHile AMD is just getting the channel supply back up, builders are getting upset that the chip makers are maintaining their volatile pricing.

CRN has a blurb about it in the midst of good news from AMD.

One system builder who declined to be named said the battle between the two chip makers isn't helping his business.

Linkage!

So now we should be paying more to both the manufacturers AND the assemblers? Hell, we might as well ask for a 25% computer owners tax to be implemented too, 5% of which will be split between the democratic and republican presidential campaign funds.

But it is goods new from and for AMD

 

[TechnologyCoordinator]

Why would it help his business? Average prices for PC's haven't dropped. The OEM's are pocketing the difference in costs. I'm not really sure why Intel started this whole price war... they have a superior product and should be charging a premium for it. In my opinion they're cutting their noses off. But if their goal is to decimate AMD, I guess it makes sense. If AMD goes away or losses significant market share, Intel can charge whatever the hell they want. Just like the good 'ole days...

Anyways, Vista will help his PC sales.

Ding. Why should system builders be bitching? So I suppose they'll be complimenting the chip makers when they raise prices back up? NOT.

My father's machine shop doesn't complain when the price of steel goes down, they smile.

 

[sirheck]

Hell, we might as well ask for a 25% computer owners tax to be implemented too, 5% of which will be split between the democratic and republican presidential campaign funds.

ssshhh! they might hear you.

 

[gr8mikey]

WHile AMD is just getting the channel supply back up, builders are getting upset that the chip makers are maintaining their volatile pricing.

CRN has a blurb about it in the midst of good news from AMD.

One system builder who declined to be named said the battle between the two chip makers isn't helping his business.

Linkage!

Last year about this time an FX60 cost $1000+

Today I can buy better performance for just a bit over $200 (An E6400)

Better performance, $700+ cheaper, uses less power, overclocks massively...

Explain to me again why this is a bad thing?


Because now the system builder has to cut $700 from the price of a comparably configured system.

If these people go out of business it hurts the economy as more business has to be pushed towards larger builders which in turn causes shortages due to additional demand.
This has the tendency to raise prices even higher than the previous level.

You could also get a 4400+ for half that and 4200+/3800+ for even less with adequate performance.

In terms of gouging, the 965EE (spanked into NON-EXISTENCE by the E6300) has just been priced SLIGHTLY competitively to FX60 or even FX62.

Can you say suckers?


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.

 

[turpit]

Hell, we might as well ask for a 25% computer owners tax to be implemented too, 5% of which will be split between the democratic and republican presidential campaign funds.

ssshhh! they might hear you.


oooops....sorry

 

[mpjesse]

I'm seeing 11

 

[mpjesse]

sometimes, like right now, i struggle to understand your posts. do you post drunk or high?

 

[1Tanker]

WHile AMD is just getting the channel supply back up, builders are getting upset that the chip makers are maintaining their volatile pricing.

CRN has a blurb about it in the midst of good news from AMD.

One system builder who declined to be named said the battle between the two chip makers isn't helping his business.

Linkage!
I think this is the real issue that's p*ssing you off, not the price-war.

"I think the greater problem they're having is the onslaught from Intel's new products. The Core 2 Duo is a very popular product and Intel is aggressively promoting them . Plus, [the Core 2 Duo has] been readily available so when AMD was having shortages, a lot of AMD exclusive customers had to switch back to promoting the new Intel products."

Kinda hurts to have to hear that...doesn't it?

 

[wolverinero79]

In fact, price war aside, Intel's been focused on making customers happy lately (look at Sun, Google, etc. - these haven't just been because of great products). If Dell wasn't going the way of the downward spiral, I would expect Intel to try to make them happier too.

 

[CaptRobertApril]

Who is seeing 13 before barcelona?10 anyone? 8?

Hard to say given that Barcelona will be out exactly on ???

If enthusiast (non server) Barcys won't be out into the channel in large quantitites until Q4 07 or even Q1 08, I say definitely single digits.

 

[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.

 

[CaptRobertApril]

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 fully agree with Baron. PC building is a cutthroat business with razor thin margins. There can't be anything like a cartel or conspiracy, since there are thousands of indy guys working out of their basements or cheap storefronts who will take every advantage of every price break that they can get from their wholesalers to move an extra couple of builds. Therefore, I'm sure that we can dig up endless statistics to prove that PC prices have come way down, especially when performance is taken into consideration. You can get a Brisbane 3600 with motherboard for $159. With a little corner cutting you can get that system on your floor for $299-$349. That is one sweet pricepoint!

 

[Wombat2]

WHile AMD is just getting the channel supply back up, builders are getting upset that the chip makers are maintaining their volatile pricing.

CRN has a blurb about it in the midst of good news from AMD.

One system builder who declined to be named said the battle between the two chip makers isn't helping his business.

Linkage!

OH NOES ... EVIL CONSUMERS ARE STEALING COMPANIES PROFITS
\
Baroness

Its called supply and demand for a reason idiot... why dont you ask Bush to pass a law fixing CPU prices :roll:

 

[heartview]

WHile AMD is just getting the channel supply back up, builders are getting upset that the chip makers are maintaining their volatile pricing.

CRN has a blurb about it in the midst of good news from AMD.

One system builder who declined to be named said the battle between the two chip makers isn't helping his business.

Linkage!

This is exactly why companies like Dell do better, because they don't have to keep huge inventories of components. If a PC maker buys 1000 CPU's for $250 each and the price drops to $200 a little while later, they will still likely have to sell PC's made from those $250 CPU's at the $200 market price (so to speak).

Like others have said, this is not an issue with the chip makers (or other components, for that matter) it is an issue with how some PC makers do business.

 

[gOJDO]

One system builder who declined to be named said the battle between the two chip makers isn't helping his business.

This is COOL!!!!!!!!
Because if the price wat isn't helping him, then it is HELPING US!!!!

 

[KlamathBFG]

[/quote]I'm not really sure why Intel started this whole price war... they have a superior product and should be charging a premium for it. In my opinion they're cutting their noses off. [/quote]

It makes total sense, AMD has just made a major acquisition (ATI) and its reserves are relatively low. AMD's future cost of capital will be effected by its short-term performance post merger (adds to cost of capital due to risk and historic performance). Higher cost of capital means products need to provide higher-forecast returns before you decide to invest making it more difficult to start new projects etc.

In effect by starving AMD of cash when it needs it Intel is forcing AMD into some tough decisions and almost certainly limiting the amount of cash their finance department will be willing to release for R&D. (Remember AMD is big enough that it needs to have fairly stable returns and dividends, i.e. the bean-counters rule).

In the long run these decisions will probably have little effect, AMD is big enough now that if it falls too far behind it will just raise massive amounts of capital to catch-up/take the lead but this could be a few years away, also bare in mind during the probably 5-10 years it will take to pay for ATI it may be more return advantageous not to lead on products, sometimes having some that is just good enough can actually lead to a higher return.

Don't get me wrong the bean-counters at Intel won't be choosing now so they can invest more in R&D, quite the contrary they will be doing it to enable them to reduce R&D / operational costs and provide higher returns.

P.S. this is always a dangerous strategy depending on the price elasticity of the consumers it may be difficult to put prices back up.

On a personal note I hope it doesn't work out but have to give 10/10 to Intel for corporate strategy it is exactly the right moment to squeeze prices if you wanted to cripple one of your major competitors in the short-term.

 

[bfellow]

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.

 

[heartview]

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

 

[gOJDO]

they have to sell it at a lower price.

The cool part I was talking about! :lol: