Original Link: https://www.anandtech.com/show/3264

It's a question of money

by Anand Lal Shimpi on September 10, 2007 12:03 PM EST


After the first price drop of '07, AMD was instantly competitive with Intel once again - not through architectural updates to the K8 core, but by aggressive pricing its processors. Once that happened, I realized that Barcelona's absolute performance didn't matter, it was what price AMD made it available at that would determine who dominated the desktop market in 2008.

The problem that I highlighted in our Phenom preview today is that it costs more for AMD to make a Phenom than it does to make an Athlon 64 X2. And AMD is already losing a good deal of money each quarter, so the only solution here is to start to move prices upstream. The problem once again becomes one of being competitive at higher price points, and AMD is back in the same situation it was in before these price wars started.

There is one variable here that is difficult to take into account, and it's something that Johan brought up as we were working on Barcelona today. How much revenue does AMD bring in from Opteron vs Athlon/Phenom? AMD is more competitive on the server side and makes more per unit sale over there than in the desktop world, so in theory the server arm of AMD could carry some of the burden of the desktop arm until 45nm rolled around.

Thoughts?

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