Advanced Micro Devices: Life beyond Intel

While the PC market was rather dull both AMD and Intel were resorting to price cuts in order to gain a larger share of the market. Intel usually reduced the price of the existing chips every time it launched a faster chip. Company sources claimed that this was done to clear the inventory of old chips. For instance, when the Pentium 4 2.8 GHz was introduced in the market, the price of Pentium4 2.53 GHz were reduced. But analysts stated that Intel was forced to cut down prices only because of severe competition from AMD. In September 2002, Intel reduced prices of its chips by upto 52%. The price of Pentium4 2.4 GHz was drastically reduced from $ 400 to $ 193 (Refer Table II). Though AMD products were cheaper than comparable Intel products, AMD also had to resort to price cuts to retain its share of the market...