Their Prices Are Insane! . . .

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AMD announces pricing on future 2.4 and 2.6GHz models.

Sort of. To quote:

“AMD intends to offer the following new processors in Q1 of 2008: a processor model 9900 (2.60GHz) priced below $350 and a Phenom processor model 9700 (2.40GHz) priced below $300.”

Note the slickness of the statement. Saying “priced below $350” sounds like something just below $350, like $349. Yet the statement is just as true if AMD prices the thing at $249, or $149, or 49 cents.

What will the price actually be? Will AMD continue to have Intel+ priced CPUs with Intel- performance? Well, that depends on whether AMD really wants to sell many, and they very well may not.

Have I gone mad? Has AMD. Neither is the case, and I’ll explain why.

AMD has two sets of customers right now; those who might buy the chips and those who might buy the company, or at least chunks thereof.

If you can’t satisfy the first, you’d better satisfy the second.

It’s obvious AMD can’t make a sizable number of K10 chips at the moment. Call it Barcelona, call it Phenom, call it scarce to unavailable.

The kindest explanation for this state of affairs is that AMD is putting all its conversion efforts into making the B-whatever stepping that doesn’t suck rather than making the B-whatever stepping that does suck.

In the meantime, you make the minimum number of chips necessary to keep the word “vaporware” away.

Since only the crazed and desperate are going to buy the things, you might as well charge insane prices so supply meets demand.

Then you can go to those investors with more cash and/or oil than sense and say, “Look at these high prices we’re getting now! Imagine what we’ll get in a few months with better products!”

Of course, you don’t mention that you got those prices on a tiny, tiny percentage of them, but if you only make a tiny, tiny percentage of them, then you turn that lemon into lemonade as say, “We sold out!”

Of course, once production increases to the point where you are forced to sell to the uncrazed and undesperate, then prices will be lowered to competitive levels. But that’s another day, another new story.

Insane? That’s just what AMD did when they couldn’t make a lot of Hammers initially, and AMD didn’t have to impress “alternative” investors back then.

This is a desperate company in crisis. It’s fighting for its life. The operational motto is now, “The ends justifies the means.” This company will do or say whatever they think it takes to live another day, another month, another year, until they either can get back on their feet by their own efforts, or some court or government commission props them up.

It’s been ugly so far, and it’s only going to get uglier in the next few weeks and months ahead.


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