Processor Price Cuts

AMD announced price cuts on their processor line yesterday and Intel will probably follow suit later this month. Price cuts drain profits of both of the companies, but consumers are clearly the winner here because it will make PC prices hopefully cheaper. Many rumors abound about why AMD is cutting prices. It could be that they are trying to make up for lost market share to Intel or perhaps they are clearing their inventory shelves when their new CPU codenamed Barcelona hits the streets which I believe will start in August. I realize of course that AMD does not have the hefty bank account that Intel has for research and development, but AMD has waited far too long to bring new CPUs and new ATI videocards to the market. Innovation is a key to profit but you must be able to bring that innovation to the market before anyone else.

As I mentioned in a previous blog, it is still my personal opinion that IBM would be wise to buy AMD. AMD might never be able to achieve a majority marketshare of the CPU industry unless drastic new technology is delivered by them to the consumer. IBM can do that if they owned AMD.