Mercury Research published their numbers showing some very interesting facts. Anyone with doubts about the importance of keeping the performance crown needs to look at this graph.
AMD’s drastic decline in overall ASP coincides with the release of Intel’s Core 2 microarchitecture. One thing to note is the increase in ASP gap between the two vendors from ~$35 in 2006 to ~$55 in 2007 simply because one had a better product. It is suffice to say that $20 per CPU is the price to pay for losing the performance crown. That is a third of the average value of an AMD CPU and is quite a lot of money.
One thing that needs to be taken into context when looking at these figures is the fact that AMD lost a lot of money in 2007 while Intel took in healthy profits. Mentioned in an earlier blog, both companies have adjusted their business model to try and meet historic margin levels. And to some degree we have seen results. But as Intel and AMD continue to battle it out, the one without the superior product has no option but to compete on price. The problem is there isn’t a lot of wiggle room starting from $60 per CPU.