AMD slashes prices and plans reorganisation
AMD is smarting from the effects of its price war with arch rival Intel. It is lowering its earnings forecast for its next quarterly financial results, due to be released next week, and the company has also hinted at a possible reorganisation to help stabilise its finances. More immediately, it has also announced price cuts across its Athlon and Sempron ranges of processors.
AMD says it will now report revenue of around $1.225 billion for the period ending 31 March 2007, citing a decline in quarter-on-quarter income for its Computing Solutions division due to price cuts and flagging unit sales.
Although it has also announced plans to tweak its operating model, AMD is still remaining tight lipped about specific changes until a conference call to discuss its financial performance is held next week.
‘AMD plans to restructure its business model to increase operational efficiencies and lower its operating cost structure,’ the company said in a statement.
In terms of rejigging processor pricing, AMD has almost halved the cost of some of its processors. For example, the Athlon 64 X2 6000+ falls from $464 to $241, a drop of 48 per cent.
While Turion and Opteron models have remained unchanged, Athlon 64 processors see a number of changes. The Athlon 64 FX-74 falls from $999 to $799 and the FX-72 from $799 to $599. And as well as X2 changes, the headline Athlon 64, the 4000+ falls eight per cent, from $102 to $94.
Note also, even bigger cuts in the Sempron range. The Sempron 3800+, for example, falls 36 per cent, from $108 to $69.
AMD’s full pricing can be found here.
Note that the FX-70 is dropped from the schedule, as is the FX-62, and the X2 list is trimmed with the 5400+, 4600+ and 4200+ being among those dropped.
AMD and Intel have been embroiled in a war of prices for some time now. In January, AMD revised its outlook for this quarter.
This announcement was quickly followed by a similar piece of news from Intel, where it reported fourth quarter results that saw operating and net incomes fall by 55 per cent and 39 per cent respectively compared to the last quarter of 2005.