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Declining to follow the price cut plan

DailyTech revealed last week ATI's new pricing strategy to compete with NVIDIA's GTS 250 rebrand, also known as the 9800 GTX+.

The ATI Radeon HD 4850 512MB was to drop to $129, while the Radeon HD 4870 512MB was scheduled to be cut to $149. This was supposed to be accomplished primarily through the use of mail-in rebates, which ATI would help offset.

Most of the board partners took up the offer on the 4850. However, due to several factors converging at once, the 4850 can now be picked up for around $120 at several e-tailers, albeit with the mail-in rebate.

The story with the 4870 is something else entirely. The Radeon HD 4870 512MB was supposed to drop to $149 with a mail-in rebate, but some of ATI's graphics card partners are resisting this as they feel that since the card outperforms the GTX 260, it should compete against that card. They instead are positioning the 1GB version of the 4850 against the 1GB version of the GTS 250 at the $149 price point.

One of our sources in Taiwan told us: "The ATI lineup is very strong, and we feel the 4850 should go against the GTS 250 and the 4870 against the GTX 260".

ATI has been very aggressive with its pricing, with lower prices and higher performance in the same segments as its nemesis NVIDIA. This has led to declining revenues for board manufacturers, already hard hit by lower demand due to the global recession.



GTX 280

ATI Radeon 4870

GTX 260 Core 216

ATI Radeon HD 4850

GTS 250

Stream Processors






Texture Address / Filtering

80 / 80




64 / 64







Core Clock






Memory Clock


900MHz GDDR5 (3600MHz eff)


993MHz GDDR3 (1986MHz eff)


Memory Bus Width






Frame Buffer






Transistor Count






Price Point






Comments     Threshold

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RE: Keep it up ATI, I mean AMD
By GodisanAtheist on 3/11/2009 4:05:14 PM , Rating: 5
AMD's entire strategy (both CPUs and GPUs) seems to revolve around the "sell more of X for less $" rather than the tried and true "sell a few of y for a ton of $".

ATI didn't even try for the single card top spot and it worked brilliantly for them. Unfortunately AMD has a much tougher competitor in the CPU ring that they have no chance in hell of undercutting.

RE: Keep it up ATI, I mean AMD
By afkrotch on 3/11/2009 4:14:24 PM , Rating: 1
Huh? AMD wants to make money, but it has to lower prices to be able to compete. Remember when AMD was on top? They sure as hell kept their prices way the hell up there. Most ppl didn't buy an X2 cause they were ridiculously priced. Whenever AMD can, they will rape you. No different than Intel or Nvidia will. They are companies out to make money.

RE: Keep it up ATI, I mean AMD
By GodisanAtheist on 3/11/2009 8:30:48 PM , Rating: 2
I don't disagree with any of that, yet at the same time it doesn't invalidate anything I said.

Regardless of reason, AMD's strategy is "capture the middle ground". Would they douche it up if they were top dog? Yeah, they probably would, but I don't see what that has to do with my post.

RE: Keep it up ATI, I mean AMD
By afkrotch on 3/11/2009 11:35:21 PM , Rating: 2
I don't think their strategy is to capture just the middle ground. I think there strategy is to make middle groud gpus and get users to do crossfire to get to the higher ground.

This has multiple effects. Their lineup is simplier. As they have less different GPUs to produce, they don't have production issues (like they did in the past). Less R&D. Cause of all that, operating costs go down, so profits rise.

RE: Keep it up ATI, I mean AMD
By tigen on 3/11/2009 8:32:01 PM , Rating: 3
It's not "rape" if you're voluntarily getting something in exchange.

"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer

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