Replies to post #14506 on Advanced Micro Devices Inc (AMD)

[wbmw]

Constantine, I'll agree that marketing dollars are responsible for Intel's ASPs, but not for their volumes. At this point, the TAM with and without branding and marketing is going to be close to equal. Intel is mostly focusing on getting existing PC owners to buy Intel, or even better, to transition their desktop system to a higher margin Centrino product.

So if you argue that an entity that controls price should be counted as a cost, then I'd have to disagree. Subtract Intel's marketing, and they'd have to sell CPUs at AMD's prices (or at least lower prices, since the current branding will have some effect going forward), but the *costs* will stay the same.

[Jules2]

"Posted by: wmbz
In reply to: wbmw who wrote msg# 14496 Date:10/2/2003 9:44:31 AM
Post #of 14555

wbmw, from a purely accounting perspective I agree with you but I remember from my college days that the cost of a "widget" is the amount of money it takes to get raw materials into the hands of consumers as finished goods. I believe that without Intel's existing marketing budget a lot of those finished goods would be piling up in warehouses instead of making it to the hands of consumers. I believe if you ask around, marketing is a fixed cost that should be included in the total cost of selling a cpu. Sorry, but it has to be.

C"

Every COA "Chart of Accounts" I ever used had a COS account "Cost of Sales" in the liability colume.

Jules