Intel Corp (INTC)

[wbmw]

Maui, I think the fundamental flaw in your argument is the assumption that IBM would compete against Intel as AMD now competes against Intel. Contrary to that possibility, I think IBM would treat an Opteron product line as any other business, and without the religious fervor we've come to expect from AMD. Rather than offering scorched earth prices in vain attempts to steal market share and "hurt" Intel, IBM would use Opteron to make money, and they'll do it because they can.

Just think. An Opteron processor with an IBM name on it is worth a lot more. IBM would put a premium on it and sell it to end users willing to pay the money. They will keep the market small and exotic, and likely continue to use Intel processors at the same time. Like their exclusive Power series, IBM would make Opteron into a specialized offering with the infrastructure and support tailored around IBM. They would rather keep it separate from the standardized Intel parts, because they aim to protect their margins from the increasing commoditization of the general purpose microprocessor.

Anyone who thinks that IBM would throw away money to fight Intel in an even larger jihad than AMD could manage (cough... Dan3), is just clueless.