AMD financial results predictions thread

[clok1966]

i never understoood the love or hate in cases like this.. Liek one o r the other is fine.. be glad there is both.. if there was only intel we would be single core 1ghz now becuase they would have had no reason to be faster. IF (or probebly when) AMD finally quits trying to compete with INTEL we will be back to $1000 CPU prices for marginal gains. Intel may be a well run company, but when they ahve no reason to Improve or price cut.. they dont..
i have a big box of reciepts fro all my PC products.. PP200 $700, 700Slocket $750.. then AMD made chips on par with intel.. all the sudden my CPU recipts where $3-400... half the price.. and my recent ones.. under $300(intel)...

like whichever.. be dang glad they are both out there.. $1000 price again wont be fun if one is gone.

 

[ShintaiDK]

i never understoood the love or hate in cases like this.. Liek one o r the other is fine.. be glad there is both.. if there was only intel we would be single core 1ghz now becuase they would have had no reason to be faster. IF (or probebly when) AMD finally quits trying to compete with INTEL we will be back to $1000 CPU prices for marginal gains. Intel may be a well run company, but when they ahve no reason to Improve or price cut.. they dont..
i have a big box of reciepts fro all my PC products.. PP200 $700, 700Slocket $750.. then AMD made chips on par with intel.. all the sudden my CPU recipts where $3-400... half the price.. and my recent ones.. under $300(intel)...

like whichever.. be dang glad they are both out there.. $1000 price again wont be fun if one is gone.

Wrong, wrong and wrong.

Volume*margin=profit. Volume depends on price. And without innovation people wouldnt upgrade. Intel only competed against itself since 2006. Before 2006 CPUs easily costed 500-850$ for dualcores. Wonder why?

And volume is required for having the fabs running and pay for the next node change.

You will not see prices higher or lower than they are today. With or without AMD. Right now they are in the perfect balance for maximum profit for Intel.

 

[Phynaz]

Liek one o r the other is fine.. be glad there is both.. if there was only intel we would be single core 1ghz now becuase they would have had no reason to be faster. IF (or probebly when) AMD finally quits trying to compete with INTEL we will be back to $1000 CPU prices for marginal gains. Intel may be a well run company, but when they ahve no reason to Improve or price cut.. they dont..

Intel only competes with themselves in the x86 market.

If AMD was holding down Intel prices then what happened to the quarterly price cuts Intel used to do? They are gone because AMD is applying zero price pressure on Intel.

 

[Abwx]

They are gone because AMD is applying zero price pressure on Intel.

Since they have higher manufacturing costs it would
be a suicidal move.

In fact , even when they owned their foundries they had
too limited manufacturing capabilities to even try to initiate
a price war , contrary to intel during the P3 time.

 

[Phynaz]

Thanks for confirming AMD is no competition to Intel :biggrin:

 

[Abwx]

Thanks for confirming AMD is no competition to Intel :biggrin:

In the hurry to gain a point ?..:biggrin:

Technicaly speaking they are competitive enough but without
manufactutring means there s no way to threaten a competitor
that has many time manuf. capacity.

Thanks to these superior means ; Intel kept being competitive
during the P4 era , compensating perfs by lower average prices
and way higher volummes.

 

[Olikan]

well...looks like i was kinda right XD

trinity ate sales of Llano...
http://www.investorvillage.com/smbd.asp?mb=476&mn=242762&pt=msg&mid=11952128

 

[pelov]

well...looks like i was kinda right XD

trinity ate sales of Llano...
http://www.investorvillage.com/smbd.asp?mb=476&mn=242762&pt=msg&mid=11952128

I'm not surprised their investors were unhappy with the way Q2 turned out. It's just one idiotic move after another, and this was done after some smart moves -- buying SeaMicro and paying their way out of the GloFo contract, both of which I think were great for AMD.

They maintained their margins, 46% (quite high), but because they oversold their Llano supplies and shorted on the other end, they decided to keep the prices (bulk) the same? People aren't going to pay the same prices for a Llano chip when they know Trinity is due or is already here.

Instead, they delayed Trinity, or limited its supply (it's not suffering from yield issues), in order to sell the overstocked Llanos. But if you don't drop the price, why would anybody want to buy them in the first place? How long is it going to take to sell them at those same prices? The only prices that will change is on account of the OEMs and that only hurts their own bottom line. If you look at the machines Llano is being sold in and the current competition and its respective price, there really is no reason to buy them unless the price for the Llano chips is lower. Apparently, AMD disagrees.

If you've got a better product that's not suffering any constraints then you push it out as fast as possible, particularly when you're so far behind your competitor. I can understand not gunning for market share, but it's also going to hurt your bottom line when you lose market share because you're unwilling to adapt to the current climate. Llano isn't going up against SB anymore, it's going up against IB and a few Trinity models. Who in their right mind would buy the overpriced Llano chip when there's clearly better alternatives?

AMD needs to pick out an OEM they get along with and push forward a new product, Ultrabook style (though not necessarily Ultrabooks; I think Ultrabooks still need another year or two or -$300 to actually make sense). Work with the OEM to provide a small laptop with decent specs and quality that can compete with Ultrabooks but doesn't suffer from the same issues (heat, throttling, space constraints, ULV processors, etc). Develop a standard, see how it goes and then if it does well others will follow suit. This "do what you want with our chips" deal only works if the OEMs make smart decisions. Intel has already learned that's not the case.

 

[Remobz]

I'm not surprised their investors were unhappy with the way Q2 turned out. It's just one idiotic move after another, and this was done after some smart moves -- buying SeaMicro and paying their way out of the GloFo contract, both of which I think were great for AMD.

They maintained their margins, 46% (quite high), but because they oversold their Llano supplies and shorted on the other end, they decided to keep the prices (bulk) the same? People aren't going to pay the same prices for a Llano chip when they know Trinity is due or is already here.

Instead, they delayed Trinity, or limited its supply (it's not suffering from yield issues), in order to sell the overstocked Llanos. But if you don't drop the price, why would anybody want to buy them in the first place? How long is it going to take to sell them at those same prices? The only prices that will change is on account of the OEMs and that only hurts their own bottom line. If you look at the machines Llano is being sold in and the current competition and its respective price, there really is no reason to buy them unless the price for the Llano chips is lower. Apparently, AMD disagrees.

If you've got a better product that's not suffering any constraints then you push it out as fast as possible, particularly when you're so far behind your competitor. I can understand not gunning for market share, but it's also going to hurt your bottom line when you lose market share because you're unwilling to adapt to the current climate. Llano isn't going up against SB anymore, it's going up against IB and a few Trinity models. Who in their right mind would buy the overpriced Llano chip when there's clearly better alternatives?

AMD needs to pick out an OEM they get along with and push forward a new product, Ultrabook style (though not necessarily Ultrabooks; I think Ultrabooks still need another year or two or -$300 to actually make sense). Work with the OEM to provide a small laptop with decent specs and quality that can compete with Ultrabooks but doesn't suffer from the same issues (heat, throttling, space constraints, ULV processors, etc). Develop a standard, see how it goes and then if it does well others will follow suit. This "do what you want with our chips" deal only works if the OEMs make smart decisions. Intel has already learned that's not the case.

Good read. I agree.

 

[Phynaz]

They maintained their margins, 46% (quite high), but because they oversold their Llano supplies and shorted on the other end, they decided to keep the prices (bulk) the same? People aren't going to pay the same prices for a Llano chip when they know Trinity is due or is already here.

You are wrong in one respect...AMD customers (the OEM's) don't behave like consumers. They don't care that Trinity is coming out, because their typical customer has no idea that it's happening or what it means.

Your error is assuming AMD's customers are just like you, and they pick out CPU's and would delay buying product. If they were delay buying product then they have nothing to sell to their customers today, and would they give those sales to somebody else.

Tl:dr version:

Individuals aren't AMD's customers. AMD doesn't sell to you. Don't assume that AMD's customer behave like you do.

 

[pelov]

Phynaz, they don't have to. You still have "old" versus "new" models, and because the price isn't much different on AMD's chip sales between the two (minus whatever the OEMs chopped in order to sell the old models), a consumer still knows. You don't necessarily have to look at the benchmarks in order to buy a newer/better product. Marketing/retail stores will generally take care of that issue themselves. It's the reason Intel has those "3rd gen core iX" stickers on every laptop/machine sold.

Also, OEMs won't pay the same prices either. They'll have higher margins and they'll make more money off of newer products than they will off older ones (remember that most are laptops so the other specs won't change). If the price on the chips is high then they can't sell their laptops at the prices they'd like in order to increase margins. You've got high stock of older gen hardware at inflated prices. Considering Llano isn't EOL until 2013+, that's no good for anyone.

 

[ShintaiDK]

OEMs want supply guarantee. They dont want to hear that you cant deliver a million CPUs because your foundry cant deliver. You cant sell something you dont have, nomatter how good ro bad it is.

 

[pelov]

OEMs want supply guarantee. They dont want to hear that you cant deliver a million CPUs because your foundry cant deliver.

They can. That's exactly the problem here. AMD isn't suffering from yield/constraint issues on Trinity yet Llano's are being sold at the same price. Llano's are overstocked and too expensive considering AMD isn't hampered by last year's yield issues. If you want to flush out last year's chips you do it at lower prices, not the same prices.

 

[ShintaiDK]

They can. That's exactly the problem here. AMD isn't suffering from yield/constraint issues on Trinity yet Llano's are being sold at the same price. Llano's are overstocked and too expensive considering AMD isn't hampered by last year's yield issues. If you want to flush out last year's chips you do it at lower prices, not the same prices.

Thats a bold claim. Basicly AMD couldnt deliver Llano in the start. Now they got too many and holds back Trinity, either on purpose or as an excuse. Thats just really bad logistics. OEMs dont like that either. Trinity and Llano aint socket compatible either. So you also need new/old boards.

Telling OEMs to hold back new models and keep selling last years tech....

 

[pelov]

Thats a bold claim.

A bold claim would be to state otherwise. Both GloFo and AMD have said Trinity supplies/yields are fine and it's because they are. Yields have been up to par since Q3 and have actually surpassed their 2011 quota. This trend has continued to 2012. The amount of chips isn't the issue, it's the Llano backstock.

Basicly AMD couldnt deliver llano in the start. Now they got too many and holds back Trinity, either on purpose or as an excuse. Thats just really bad logistics. OEMs dont like that either.

http://www.brightsideofnews.com/new...sis-company-admits-huge-llano-sales-slip.aspx

In the call it was made clear that bad planning and execution of Llano sales in the channel were one of the main causes of the 11% revenue decline the company reported. The executives explained that the reason for this was that OEMs initially got preferential treatment on Llano, which resulted in a bad supply situation in the channel. Once they got the necessary supply for the channel, there were not enough motherboards allocated and the pricing environment also adversely affected sales.

Consequently, the channel aligned their strategy around other products, whereas on the OEM side of things Llano was a very strong seller. The main culprit in all of this was bad communication of the advantages the Llano product had, which Rory Read has promised to fix going forward. AMD reportedly has a higher than usual inventory of Llano chips, which they plan to sell over the remainder of 2012 and even into 2013. This is a direct confirmation that Llano will not be phased out anytime soon.

AMD also has a similar situation with Trinity. Trinity launched in June, but currently is only available in notebooks and desktops from OEMs. The channel launch was planned for fall 2012, but at this point we have no more information to share about when exactly it will happen. In the last few weeks rumors repeatedly came up claiming it has even been postponed by a few months.

During the call it was said that Trinity’s volume doubled in Q2 compared to Q1. Considering that in Q1 shipments started rather late, we have reason to believe that double the volume is still just a small number of chips. We do not know whether there is a supply side problem with Trinity or the company simply wants to sell off Llano inventory before they aggressively push Trinity, which is much more attractive to customers, as we explained in our launch preview. Rory Read stated they were not supply constrained with Trinity, which would make Llano inventories the more likely cause.

Combined with the fact that AMD opted to protect their margin and the statements made in the call regarding the inventory situation, the longevity of Llano well into 2013 as well as the delayed channel-launch of Trinity, we have reason to believe that AMD has considerable inventory of Llano which needs to be sold off at stable prices. If they would slash prices, a lot of this value would need to be written off, thus having an adverse effect on AMDs financials.

This is what I disagree with. I'd wager that not slashing the prices is going to hurt them even more due to a decrease in potential sales and the subsequent delay of Trinity -- again, not delayed because of yield/supply but because they've got too many Llanos.

 

[ShintaiDK]

And yet you dont understand the supply guarantee issue?

Try tell Dell that all those 1 million FM2 mobos needs to be put in a dark warehouse somewhere, only to be picked up at a random time when we feel we sold enough Llanos. But please remember to manufactor another million FM1 boards in the meantime for our last years tech. And please remove the new models you wanted to launch and tell custoemrs they need to keep buying the old.

Oh ye, and people dont understand why for example Apple dont want anything to do with AMD CPUs?

AMD never understood the business. And therefore will never have any success.

 

[pelov]

And yet you dont understand the supply guarantee issue?

Uh... it wasn't me who said this:

Thats a bold claim. Basicly AMD couldnt deliver Llano in the start. Now they got too many and holds back Trinity, either on purpose or as an excuse.

or this

OEMs want supply guarantee. They dont want to hear that you cant deliver a million CPUs because your foundry cant deliver. You cant sell something you dont have, nomatter how good ro bad it is

I think I understand the issue quite well. AMD screwed up badly and it has nothing to do with the foundry but rather the shipments and overestimation, which can partly be pinned on the OEMs as well. The topic of discussion here is Q2 2012, not Q1/Q2 2011. You've got things mixed up.

AMD never understood the business. And therefore will never have any success.

You're too hung up on pro-Intel to actually read what I'm saying and you seem to want to argue without getting your facts straight. I'm criticizing AMD and Read for being stupid and handling this the wrong way. Yet you're saying, "No, you're wrong. AMD handled this the wrong way!" You're right, now how the hell am I wrong?

 

[AtenRa]

AMD never understood the business. And therefore will never have any success.

http://www.amd.com/us/aboutamd/corporate-information/executives/Pages/rory-read.aspx

Rory Read
President and Chief Executive Officer, AMD

Rory Read is president and chief executive officer of AMD and also serves on the company’s board of directors. Prior to joining AMD in August 2011, Read served as president and chief operating officer of Lenovo Group, Ltd. He previously spent 23 years at IBM serving in various global leadership roles.

Read’s five year tenure at Lenovo featured an extensive track record of growth, transformation and innovation. Read led the company through a substantial business turnaround, marked by market share gains and revenue growth. Read also led Lenovo’s entry into the tablet and smartphone markets. At the time of Read’s departure, Lenovo had just marked the 7th straight quarter as the fastest growing PC maker in the world and had become the world’s third largest global PC manufacturer.

While at IBM, Read consistently drove revenue growth while significantly improving the operating profitability for the groups under his management. As Managing Partner for IBM’s Business Consulting Services Industrial Sector, Read led the division through a turnaround that significantly improved gross margins, drove new customer acquisitions and generated double digit revenue growth and operating profitability.

I believe he knows and understands the business better than you or me or anyone else here.
We luck vital information to come to conclusions right now

 

[ninaholic37]

well...looks like i was kinda right XD

trinity ate sales of Llano...
http://www.investorvillage.com/smbd.asp?mb=476&mn=242762&pt=msg&mid=11952128

How are the numbers for Ontario so high? Do they not know there's a difference between Ontario (9W C-Series) and Zacate (18W E-Series)?

 

[frozentundra123456]

http://www.amd.com/us/aboutamd/corporate-information/executives/Pages/rory-read.aspx



I believe he knows and understands the business better than you or me or anyone else here.
We luck vital information to come to conclusions right now

I dont know whether RR will be a good executive or not. However, I find it amusing that you quote his qualifications from an AMD site. Kind of like quoting one's own resume. What do you expect AMD to say: "He is a bad businessman so we hired him as CEO"?

I am not saying he is good or bad per se. I think it is too soon to say. All I am saying is that a quote from AMD's own site is probably not the best source to use to judge his qualifications.

 

[Phynaz]

Phynaz, they don't have to. You still have "old" versus "new" models, and because the price isn't much different on AMD's chip sales between the two (minus whatever the OEMs chopped in order to sell the old models), a consumer still knows. You don't necessarily have to look at the benchmarks in order to buy a newer/better product.

Most consumers don't know crap besides what the Best Buy salesman tells them. They don't look at benchmarks. They don't even know they exist.

 

[Homeles]

Most consumers don't know crap besides what the Best Buy salesman tells them. They don't look at benchmarks. They don't even know they exist.

You don't necessarily have to look at the benchmarks in order to buy a newer/better product.

:thumbsup:

 

[pelov]

Most consumers don't know crap besides what the Best Buy salesman tells them. They don't look at benchmarks. They don't even know they exist.

The Best Buy salesmen know enough to point out which is new and which isn't. If they don't then the sticker on the laptop tells you which one is the newer one.

 

[Phynaz]

The Best Buy salesmen know enough to point out which is new and which isn't. If they don't then the sticker on the laptop tells you which one is the newer one.

The Best Buy salesmen know enough to point out which units they've been told to move.

 

[jpiniero]

I think it's a general misconception among enthusiasts that Windows 8 will not do well. It's not marketed towards PCs despite what Steve Ballmer and the Microsoft marketing folks are saying.

Except Amazon (and now Google with the 7) have destroyed the profitability of the tablet market. Only Apple can get away with it; and only so much now as their recent results showed. The Surface isn't going to sell unless they plan on selling it near $200, which seems unlikely. On top of that, they've ruined their relationship with their OEMs now.

It just seems like Windows 8 is just going to accelerate the demise of the PC. Which is of course bad news for AMD.