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  AMD's price reductions, a fruitless exercise? 
  Jul 19, 2006, 07:30am EDT 
 
By: Sander Sassen

Last week weíve seen the introduction of the most impressive new processor architecture to date, an introduction that seems to have caught AMD off guard. But has it really? AMD must have anticipated Intel would have a card up its sleeve as weeks before AMD already signalled it would reduce pricing on its processors shortly after the launch of Intel's new generation of processors. So that begs the question if AMD has been resting on its laurels every since they introduced the K8 architecture? Traditionally the companies that lead in this industry lead by innovation, those that fall behind are those that think that they have a product with unbeatable features and/or performance and are proven wrong time after time.

Granted, AMD's K8 architecture has shown to be a very capable architecture as it held the performance crown for the last few years, but was AMD thinking Intel would keep on dragging its feet? All things considered Intel is a big innovator; they are the driving force behind many of the new technologies that have debuted in the past few years; PCI-Express, Serial-ATA, etc. etc. AMD on the other hand has been milking the K8 architecture for all itís worth and apparently did not look much beyond the next quarter. AMD looked to be more concerned with migrating their current line-up to a smaller process than worrying about a new architecture. In hindsight they might have gambled on the wrong horse; as a smaller process will indeed cut production cost and increase production volume, but without a demand for their processors this is a fruitless exercise.

Intelís new processors not only offer better performance, they also cost a fraction of what AMD is charging for their processors. For example the $316 Intel Core Duo E6600 keeps pace with the $999 AMD Athlon FX-62, AMDís current top-of-the-line offering. Although the Athlon FX-62 has never been a hot-selling item, itíll be particularly hard to sell now. Whatís more important to note is that a price reduction is all that AMD can offer at this point, which should result in a bunch of red flags going up, because if AMD had another card up its sleeve now would be the time to pull it out. Unfortunately all they can muster at this point is the following quote from a press-release:

AMD is developing a new platform for the PC enthusiast market. Itís a decidedly multi-core processor, the multi-threaded application future for the PC industry. AMD believes it will have the best solutions for the market in 2006. ďIn our technology development for the PC enthusiast market, AMD is seeing an 80 percent average performance uplift from four core over two core AMD64 processor-based systems on multi-threaded benchmarks including Futuremark 3DMark 06, Maxon Cinebench R9.5, and WinSAT running on the latest beta release of Windows Vista.Ē

Obviously these claims are not substantiated with benchmarks or verification by an independent third party. Hence theyíre bold claims to make without any evidence to back them up, or is AMD simply trying to steal some of Intelís thunder? Also thereís no mention of their upcoming K8L architecture anywhere? Has that new architecture perhaps been obsoleted with the launch of these new Intel processors, even before it has been officially launched? Either way it is a fruitless exercise if these new processors will not be ready to ship in due time, especially if youíre looking to buy a new PC this year. Considering the fact that AM2 needed several revisions to perform on par with S939 and thereís a ~50% performance gap between comparable AMD and Intel processors I donít expect AMD to pull anything innovative out of their sleeve in the near future. As honestly thatís a pretty big performance gap that AMD needs to plug, whichever way you choose to look at it. As mentioned the focus for AMD seems to be on shrinking the manufacturing process to cut cost and up the volume. It looks like Intel will be in the driver's seat for a while and all AMD can do to stay competitive for now is reduce pricing on their processors.

Sander Sassen.

 

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Re: AMDís price reductions, a fruitless exercise? akshaya bhatia 0 replies Jul 21, 2006, 01:41am EDT
Re: AMDís price reductions, a fruitless exercise? Janick Bernet 125 replies Sep 18, 2006, 09:32am EDT
Right on Wayne Bradford 5 replies Jul 19, 2006, 08:07pm EDT

 

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