The Policy Cracks

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The Inquirer reports that AMD is reducing official prices on some Hammers.

It’s a mixed bag of cuts. The highest end processors aren’t being cut at all, the middle range seems to be going down a pricing notch, while the low-end is going down one-to-two pricing notches (granted, the notches are pretty small down there).

What is important to note about these cuts is not so much their amount, but rather that AMD is beginning to abandon its Intel price parity policy. This most likely isn’t an advance price cut in anticipation of the next Intel price cut, simply because Intel’s next product introduction (the 3.8) won’t also entail a price cut.

Below the top level, the policy at the moment appears to be to price a Hammer a notch below the equivalent Intel chip. It is noteworthy that the low Pricewatch price for the lower-end Hammers is already a bit below the “cut” price.

Another minor point is that there seems to be a few gaps in pricing that will probably end up being filled by new processors. There are gaps at the $178 and $417 mark, which would be filled rather nicely by a 3100+ and a 3600+, so expect to see such creatures sooner rather than later.

We believe that in the months ahead, we will continue to see AMD price erosion as 90nm production increases, and AMD needs to sell more Hammers and finally start phasing out AthlonXPs.

Of course, there is erosion, and then there are collapses. It’s too early to tell which we will see over, say, the next six months.

Ed

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