What A Stupid Story! . . .

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I refer, of course, to this one.

This story is so clueless; it’s D-U-M, dumb.

Let’s start with a quote:

“Intel is widely expected July 22 to cut prices on its three desktop quad-core processors and July 29 to its quad-core server SKUs. The Intel price cuts are perhaps all part of its own cunning plan, but they come on the heels of AMD’s own round of price-slashing last week. There’s no small amount of speculation that Intel’s anticipated move is a reaction to AMD’s, and from there the leap to predicting a brand new price war isn’t a terribly long one.”

If the author had a clue, he would have known that the exact details of a 3Q Intel price cut was known back in March. The exact date of the cut was known in mid-May. The only interested party that didn’t know about this cut appears to be the author.

Even AMD knew about it, and they did what they’ve been doing the past few years. Rather than say “Me, too” right after Intel, what AMD has been doing is announcing their matching price cuts a couple weeks before Intel (and actually cutting the price a week or two before that). The only difference this time around is that word leaked out on the exact date of the cut early.

So Intel didn’t “respond” to the July 9 AMD cut, that cut had been planned months and months ago. AMD isn’t going to “respond” to the July 22 cut because they preemptively responded July 9. So of course AMD is going to say “We’re not responding,” they already did.

Some may say, “But the AMD guy said in the article that the AMD cuts had nothing to do with the Intel cuts.”

No, that’s what the AMD guy wanted you to think he said. What he said was the price cuts were “not a reaction to anything that Intel had done.” Done, past tense. Intel will cut prices July 22. Will, future tense. AMD’s price cuts were a reaction to what they know Intel is going to do.

It’s a trivial point, but do you see how these folks play stupid word games even on minor points. I mean really, do you think AMD cut prices because they felt guilty about the outrageous profits they’ve been making lately? 🙂

The most ridiculous point, though, is the idea that AMD can stop this price war. To be fair, this notion seems to have sprung from the imagination of the author, all the AMD guy said was “we’re not cutting prices really soon (after all, we just did).”

AMD didn’t start this price cut, and they can’t finish it. They can stop matching the price cuts, but then they’ll lose marketshare.

Intel started it, and Intel will decide when it’s over. AMD’s price cuts this year have been defensive, not offensive in nature. They’ve either been in response to Intel’s cuts, or in response to unit sales falling off the table.

That being said, all signs are that Intel will pretty much leave well enough alone the rest of the year; there has been no indication of any more mainstream cuts the rest of the year. Looks like things will start to heat up again when Penryn-class processors show up outside of serverdom early in ’08. Before then, they might lower some Xeon prices to minimize Barcelona revenue, but that will be about it.

Really, haven’t they done enough to AMD pricing already?

Ed


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