Between K7 and K8 era, AMD was known to have the best performance/price ratio CPUs, not the cheapest ones. Thanks to K7 products, AMD made a qualitative leap: Palomino CPUs were a huge bargain for the consumers, especially gamers. AMD sold its CPUs at a lower price than Intel not because its CPus were inferior, but for a marketing choice. With the K8 CPUs, Ruiz tried to follow Intel marketing path.
The real problems started with the first Phenom iteration, and later with Bulldozer CPUs. AMD, to staying afloat, had to sell its processors for a small amount of money. This change of mind had a damaging effect on customers perception of AMD: AMD was not longer the leader, and it was not acknowledged anymore as the company with the best performance/ratio CPUs since K7. This was a huge marketing mistake, even if it was a set route: “But when price becomes the focus of a message or a company’s marketing activities, you are beginning to undermine your chances to be perceived as being unique. What you’re doing is making price the main consideration for picking you over your competition. That’s not a healthy way to go. Few companies find happiness with this approach for the simple reason that every one of your competitors has access to a pencil. And with it, they can mark down their prices any time they want. And there goes your advantage” (Differentiate or Die, by Jack Trout, Pag. 45). AMD had lost its own distinctive trait.
MaximumPC, 02/2008
K6, and later K7 allowed AMD to use the same strategy Dell used against IBM and Compaq in 1980-1990: “They attached IBM and Compaq with comparative ads featuring side-by-side photos of computers. Copy under a Dell PC: “The lap of luxury” with a $3.899 price tag on the screen. Under a Compaq model: “The lap of lunacy” with a $7.699 price tag” (Differentiate or Die, by Jack Trout, Pag. 47). If you are the cheaper solution, doesn’t mean that you are the worst solution.
AMD ads, InfoWorld, 04/1997
Lisa Su has to restore the old AMD distictive trait: a cheap and luxury brand, just like during K7 era. But how? With the RyZen CPUs, of course.