quote:
AMD Athlon64 3200+ Processor, Retail
Built on AMD64 arcitecture, the AMD Athlon 64 processor is designed to deliver outstanding levels of performance and customer-focused innovation to home and business users alike.
Regular Price: US$463.00
AMD Athlon64 FX-51 Processor, Retail
Built on AMD64 arcitecture, the AMD Athlon 64 processor is designed to deliver outstanding levels of performance and customer-focused innovation to home and business users alike.
Regular Price: US$829.00
MSI K8T Neo-FIS2R S754 Mainboard w/Audio/SATA/RAID/FW/GBLan
World's first AMD Athlon64 mainboard!
Regular Price: US$180.00
http://www.xbitlabs.com/forum/viewtopic.php?t=1583
AMD's high Athlon 64 pricing is a dangerous gambitquote:
FOR MOST of its life, AMD has billed itself as being the cost-effective Intel alternative, often claiming to offer better performance at a lower price. In the 1980s, lower costs were used as enticements to gain buyers who were afraid that non-Intel processors wouldn't run software properly. When AMD bought NextGen and began aggressively designing its own chips and departing from the Intel party line, such price disparities often made up for lower performance. The K5 wasn't very performance-competitive to the Pentium, and while the K6 and K6-2 processors were clearly the best non-Intel alternative around, they weren't "great" chips. If you were a gamer on a budget, a K6-2 was an alternative - as compared to the Cyrix or Winchip designs, which clearly weren't - but it wasn't the chip you wanted if you had any options. AMD initially gained ground with the chip in the low-end, but found itself increasingly pressured by the Intel Celeron as time went by.
In 1999, Athlon's launch changed the rules of the game. Now AMD offered performance that was "just-as-good-as-Intel" at a lower price. Reports of unstable motherboards and early errata spotted the chip's record somewhat, but Intel's skyrocketing prices on higher-yield Pentium IIIs gave AMD the edge that allowed it to recoup significant margins and price below Chipzilla. This trend continued through 2000 and early 2001, but a severe downturn in the semiconductor market coupled with much-increased competition from Intel hammered AMD from both sides. Margins and chip prices fell and the company began to bleed red.
Moving to the AthlonXP model numbers gave AMD some margin leverage again, as did the release of the 2600+ processor about a year ago. Intel still retained overall control, however, and AMD was forced to cut prices, or keep them low, in order to move chips. This has resulted in Barton 2500+ processors easily overclockable to 3200+ speed or more that are available for well under $100.
Clearly this state of affairs cannot be allowed to continue, and AMD's upcoming Athlon 64 launch gives the company an opportunity to rectify the situation. This is all well and good, but Sunnyvale may be jumping overboard in their haste to raise the bottom line. The high-end Athlon 64 FX-51 is now expected to sell for as much as $800, while even the "consumer-level" Athlon 64 3200+ will be a $400+ part.
High prices at CPU launch are nothing new, but AMD has already stated they have no intention of offering Athlon 64 parts at the price/performance ratios buyers have come to expect. The philosophy behind this move is two-fold. First, because Athlon 64 is equal in performance to the P4, logic implies that it should be priced equally to the P4. Second, AMD feels that lower prices have actually hurt it in many markets, leading to a belief that because AMD's parts are cheaper, they obviously can't be as good. This is where the "Intel overcharges" belief runs directly into a "You get what you pay for" mentality. To some, AMD is a sign that it is possible to get high-quality hardware at a good price, to others the company's prices are a symbol of its desperation to gain market in spite of their lower quality.
While we understand and appreciate AMD's need to raise its revenue, jacking its CPU prices up this high, this fast, is probably not the way to achieve that goal. While the company's lower prices have undoubtedly pushed some buyers away, it's also opened the doors to many others who otherwise would've been dependent on systems of substantially lower quality. As the CPU manufacturer that gave the $1000 computer a decent processor back in the late 90s, AMD has often been seen as a champion of price/performance. Abandoning that position at this juncture is likely to leave some customers feeling that Sunnyvale is trying to bilk them out of money based on the magic of "64-bit-ness", even though such features won't be useful for months, if not years to come.
In reality, offering Athlon 64 at such a high price will only slow that processor's entry into the market and make it that much harder to convince software developers to write AMD64-bit software. It's also a slap in the face to many of the AMD enthusiasts and buyers who have stuck with and recommended the company to others over the past year. Offering good chips at a great price is the only reason AMD was able to hold on to any sort of competitive status in the last year at all—while the AthlonXP usually wasn't quite competitive to the P4 (which got worse as time went on) it almost always offered 85-90% of the performance (minimum) at a good 65-80% the price.
The only rationale for AMD keeping prices so high, in fact, is if it is purposely trying to lower demand for the processor. The basic economics of supply and demand state that as price rises, demand falls, and AMD is already on record as stating that they don't intend to fully ramp Athlon 64/Opteron production up until the beginning of 2004. This could mean that stocks of Athlon 64 / Opteron processors are limited, and rather than risk running short, AMD has chosen to deliberately keep the price high. Low stock doesn't necessarily mean low yield—AMD might be getting very good yields now on Opteron/Athlon 64 CPUs, but simply not have much production capacity at the moment. If this is the case, we should start to see prices coming down as 2004 approaches. AMD will have to cut prices sooner or later if it wants to drive Athlon 64 into the low end, but that may be where the 256K "Paris" version of the core comes in when it shows up next year.
Even if AMD chooses to keep Athlon FX-51 prices sky-high, the company would do well to introduce some modest price cuts to the Athlon 64 line, or at least waterfall the prices nicely after the top-of-the-line, high-priced Athlon 64 3200+. There is a grey area between Intel-sized margins and substantially increased AMD profits—and we think the company would do well to find it.
http://www.theinquirer.net/?article=11527