Frankly I'm a little bemused by your response.
There's nothing wrong with either AMD or INTC lowering or raising prices, it happens all the time. For some reason I can't fathom you seem to view the Opterons and Itaniums as competitors. While I would agree on TCO basis the Opteron is a better buy; from a mind-share point of view both companies have positioned their products very differently.
Itanium is "big Iron"; Opteron is being sold into the 1, 2, 4 and 8 way server market where Xeon plays, if it can. I suppose the 8 way Opterons may give some heat to Itanium, but Itanium is not the primary target.
Of course AMD fans know that the Opteron is really Clark Kent and when it gets its big red "S" suit out it makes a really dandy super computer. But that's geek stuff, and not the market AMD is addressing with its' limited marketing $s.
It looks like Cray has big plans for business super computers, using Opterons, but even there, Cray seems rather agnostic. The problem is that Nocona isn't in AMDs league yet so Cray doesn't even consider it. Sun also appears to have big plans for the Opterons in large arrays, but both Cray and Sun machines are a ways off. Those are the machines that will compete with "Big Iron", whether it be from INTC, IBM etc. In the meantime AMD is happy with the soft under-belly of the X86 server market as its target.
In any case the reason AMD lowered prices so much was to stimulate demand for Opterons. How well that has worked is still undecided, but AMD seems to think it will have 10% of the X86 server market by year-end. If so the price cuts will have been more than justified. Also, the price cuts will assume less significance as the move to 90nm progresses.
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