Facts of Life . . . 1694

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It is becoming increasingly clear that come June/July, AM2 is not going to match Conroe.

Will it also be true that, as the website that did the review said, “all Intel has to do is execute Conroe on schedule, delivering the performance we’ve been promised and 2006 will be painted blue.”

That we doubt, both overall and on the enthusiast level, though for entirely different reasons.

On the overall level, Conroe/Merom will be a mixed blessing simply because Intel isn’t going to make a whole lot of them in 2006. For the second half of 2006, most of Intel’s sales will have to come from CPUs that even they say are decidedly inferior.

You may say, “Well, isn’t that true with every new generation of processors?” Well, historically, new generations of processors debuted at around $600, which was sufficient to cool most people’s jets. The cheapest Conroes will cost closer to $200 when they launch.

Intel is going to have a very interesting time trying to sell both types for roughly the same price. The biggest potential threat to AMD in the overall market for 2006 isn’t Conroe; it’s heavily discounted/rebated Prescotts and Preslers.

On the enthusiast level, 2006 won’t be “painted blue,” either, but the reasoning here will be more ideological than financial. We’re not going to see the massive shift from one company to another that we saw when the PIII broke, and cheap T-Birds beckoned.

AMD fans will not abandon the company wholesale for Intel simply because 1) switching will cost a lot more than it did in the T-Bird era and 2) people will wait to see what 65nm Revision G chips will do in 2007.

What they probably won’t do is eagerly buy a lot of AM2 systems before the 65nm chips come out, only those way behind the curve are likely to do that.

Combine that with the inevitable media attention about Conroe being better, and maybe it’s not the best time for AMD to have extra chips to sell from Fab 36 and/or Chartered, especially given the general shakiness in demand lately.

Put it all together, and the second half has both Intel and AMD having to sell tons of CPUs no one ought to terribly want, and a relative handful of highly desirable chips.

Seems likely to me that we’ll see a good deal of pricing pressure downward for most of the CPUs the two companies sell, and perhaps an Opteron-like price surge on Conroes.

Ed


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