Intel to Discontinue Premium Packaging for Two CPUs, including 12th Gen Core i9-12900K

[Grimlakin]

To summarize.

Being a good Corporate citizen is a balancing act between maximizing profit and giving a tangible return on perceived performance or good will to your user base. Riding that balancing act is the important thing.

What AMD has done is appealed to the enthusiast to build mindshare if not market share. And it has worked well for them. That mindshare they started cultivating when I was just getting into building my first PC (after.. a couple Intel's I bought.) with solid performance saw me go AMD. sure I went intel after because AMD couldn't compete in the market tangibly, but I watched and I waited and when it was time I upgraded and went AMD.

Unless the next round of benchmarks and reviews blow me out of the water I'll probably go Nvidia for my next GPU only because I want the additional features that come with their consumer cards. AMD is trying but they clearly are not there yet. (Their noise cancellation is unstable and not tangibly better than what is built into the apps today like Teams or Discord.)

So being a good corporate citizen (to get back on topic) and having interesting packaging (the FUN bit of CPU purchasing really) will see me stick with AMD for a long time. They don't need the TOP performance crown because I don't spend for the VERY highest end CPU. or Video card. They just need to have feature/Performance parity to see me stick with them for my hardware currently.

I'm sure as leadership changes and market dominance (if it happens) sets in they will become the colder... less cutting edge CPU/Gpu vendor. Who knows... maybe Apple will have the M5X4 SUPER all in one chip half the size of a motherboard that performs the same as a top of the line CPU and GPU and PCiE XXX storage all in one and nobody that wants top end performance will have towers...

 

[Brian_B]

That's the most cynical view I've ever seen.

Zath is being cynical. He’s also absolutely and entirely correct.

 

[Brian_B]

if you extract all of the money out of a company with shortsighted decisions and leave it with no future prospects, then there won't be any more shareholder returns...

There are plenty of examples of exactly this. Look at Sears/K-Mart, just for a recent and high profile example.

They were bought out by a fund and are being stripped for all they are worth. When the fund is done, they will float it off as a bankrupt asset and take the write down to offset tax burden from other more profitable ventures.

You can even make money killing off companies, it seems.

 

[Brian_B]

Riding that balancing act is the important thing.

The only thing that makes companies do so is valid and healthy competition. It’s the check that holds a lot of the bad parts of capitalism in balance.

You remove that consumer choice, and the entire capitalist theory falls apart.

 

[MadMummy76]

I never said anything about the shortest amount of time. A good company takes a long term view. It should still be about maximizing shareholder return, but if you extract all of the money out of a company with shortsighted decisions and leave it with no future prospects, then there won't be any more shareholder returns...

Maximizing profits implies now, ASAP. Having the long term perspective is not maximizing profits, it is maximizing sustainability. If you take that road you will undoubtedly have less profit, but a more realistic long term future.

Again, keeping customers happy is a part of maximizing profits. If you piss of your customers and they leave, then you aren't maximizing profits. The key is to keep the customers happy enough that they keep buying, without giving them everything they want, such that it reduces profits. It's a balancing act for sure, but the motivation at all time remains maximizing profits.

Phrasing!! Maximizing profits means extracting as much money as possible at every moment. If you give any Fs about long customer satisfaction you are not maximizing profits (I'm sure at the dismay of current shareholders). In a way shareholders are the customer's enemies. Maximal happiness for one means maximum dissatisfaction to the other. There needs to be a balance for publicly traded companies. And this is why I think the whole stock market is a cancer, but that's another topic entirely.

If a fancy package costs more than it gains it shouldn't have been used even if profit margins were higher. The only justification for a fancy package is if it drives more sales, such that it outweighs the cost of the package.

But you do not know how much it gained or lost. And there are more strategies than profit. A product can be sold at a loss to drive name recognition and through that sales of completely different products.

If you are in a retail environment where people buy products like shampoo off a shelf, you absolutely need an eye-catching package, or your product just won't be noticed. That's not how most people have bought CPU's in a very long time. The fancy packaging Intel has had on their premium CPU's has thus cost more in bottom line than it has driven in top line since its inception, and as such should never have been done in the first place.

You seem to be in the possession of insider information. Do you really think, they had no goals with the packaging, just did it for fun?

When was the last time you bought a CPU because of the package?

Almost every time. If the boxed CPU doesn't cost significantly more than tray / oem CPUs, I always go for the boxed one.
Plus a fancy package can be the deciding factor if someone is unsure between two similarly positioned products.

Directly, no. But it drives general goodwill. Lots of PC hobby consumers view AMD as the "good guys".

That has nothing to do with giving to charity, but everything to do with them being percieved as the underdogs.

While it is patently false, as there are no corporate "good guys", just companies trying to maximize profit, it is also not by accident. AMD has cultivated this image carefully for decades, by supporting open standards, open source, trying to come across like they are helping the end user by offering lower cost products (when in reality it was simply that they HAD to offer them at a lower price as they weren't fully competitive) etc. etc.

So they weren't maximizing profits, they were trying to extract as much good press as possible.

This type of approach drives goodwill, and goodwill can be tremendously useful. Not only does it drive customer loyalty, (how many AMD fanboys kept buying only AMD even when AMD didn't have even remotely competitive products?) but appearing like the good guy can also have great benefits if - for instance - you ever wind up in court. Don't underestimate the real financial value of goodwill.

I don't think customer good will extends into a court room. Plus I'm more skeptical about that good will. You can have all the good will over 20 years, if you are not offering products with a reasonable value it will avail you nothing. That's why they were forced to sell chips so cheap when they fell behind. If the good will was as powerful as you suggest, customers would buy AMD even if they offer measurably less performance for the same price. I've never seen anyone willingly do that.

To sum it up, your "maximizing profits" was actually about is maximizing sustainability, which I'm on board with. Maximizing profits looks like Square Enix and Blizzard in the gaming space, maximizing sustainability looks like the Embracer Group, and I'm sure the latter has much less profits.

 

[Niner51]

Who thinks they will reduce price because the boxes are less fancy? Anyone? No? Yea this is a pure extraction of profit maneuver.

They did this with the 9900K a few years back and I don't recall them really lowering the price at that time, and that packaging was more over done than the 12900K.

 

[Brian_B]

Maximizing profits implies now, ASAP. Having the long term perspective is not maximizing profits,

That isn’t true. You have short and long positions officially recognized by the stock markets, and you can get much more nuanced in a board meeting

After all, if profit was only measured short term there would be no such thing as investment — which is very much a corporate and financial vehicle

 

[Tempest]

Corporate law and shareholder primacy... What a depressing topic.

The Shareholder Value Myth

Shareholder-value thinking dominates the business world today. Professors, policymakers, and business leaders routinely chant the mantras that public ...

corpgov.law.harvard.edu

Corporations Don't Have to Maximize Profits - NYTimes.com

www.nytimes.com

There Is No Effective Fiduciary Duty to Maximize Profits

Corporate law in six minutes

medium.com

Stakeholder Governance and the Fiduciary Duties of Directors

Read our latest post from Wachtell Lipton founding partner Martin Lipton, partner Karessa L. Cain, and associate Kathleen C. Iannone.

corpgov.law.harvard.edu

Dodge v. Ford Motor Co. - Wikipedia

en.wikipedia.org

If I buy AMD or Intel stocks, they're legally obligated to send me the top-binned parts. That's my interpretation of the law; opinions my vary.

 

[Niner51]

Lots of PC hobby consumers view AMD as the "good guys"

I could never understand people looking at AMD that way. Just because you're the underdog 90% of the time doesn't make you a good guy. Neither Intel or AMD really fall within that category.

 

[MadMummy76]

That isn’t true. You have short and long positions officially recognized by the stock markets, and you can get much more nuanced in a board meeting

After all, if profit was only measured short term there would be no such thing as investment — which is very much a corporate and financial vehicle

The stock market has very different rules than the actual consumer market.

There are two types of investors, well three if you count shorting. But the two main types are the one who buys stock and keeps them for the dividend, and the one who buys stock in the hopes of the price going up. To pay out more dividend a company needs to make more profit, but a stock can rise in value without an increase in actual profits, or turning any profit for that matter, the stock market operates on whims and feelings.

 

[Zarathustra]

Corporate law and shareholder primacy... What a depressing topic.

The Shareholder Value Myth

Shareholder-value thinking dominates the business world today. Professors, policymakers, and business leaders routinely chant the mantras that public ...

corpgov.law.harvard.edu

Corporations Don't Have to Maximize Profits - NYTimes.com

www.nytimes.com

There Is No Effective Fiduciary Duty to Maximize Profits

Corporate law in six minutes

medium.com

Stakeholder Governance and the Fiduciary Duties of Directors

Read our latest post from Wachtell Lipton founding partner Martin Lipton, partner Karessa L. Cain, and associate Kathleen C. Iannone.

corpgov.law.harvard.edu

Dodge v. Ford Motor Co. - Wikipedia

en.wikipedia.org

If I buy AMD or Intel stocks, they're legally obligated to send me the top-binned parts. That's my interpretation of the law; opinions my vary.

That is all good and well, until the shareholder appointed board fires the CEO for failing to achieve expected returns.

Ultimately the shareholders are the boss, and they eventually get the business decisions they want. In most cases these are the business decisions that attempt to maximize profits. In some cases you have more activist shareholders looking for something else, but that is relatively rare.

 

[Brian_B]

Corporate law and shareholder primacy... What a depressing topic.

The Shareholder Value Myth

Shareholder-value thinking dominates the business world today. Professors, policymakers, and business leaders routinely chant the mantras that public ...

corpgov.law.harvard.edu

Corporations Don't Have to Maximize Profits - NYTimes.com

www.nytimes.com

There Is No Effective Fiduciary Duty to Maximize Profits

Corporate law in six minutes

medium.com

Stakeholder Governance and the Fiduciary Duties of Directors

Read our latest post from Wachtell Lipton founding partner Martin Lipton, partner Karessa L. Cain, and associate Kathleen C. Iannone.

corpgov.law.harvard.edu

Dodge v. Ford Motor Co. - Wikipedia

en.wikipedia.org

If I buy AMD or Intel stocks, they're legally obligated to send me the top-binned parts. That's my interpretation of the law; opinions my vary.

I'll also note:

The first Harvard article is an advertisement for a book, and the second Harvard link is an advertisement for a legal firm.

The second article states this:

And corporate case law describes directors as fiduciaries who owe duties not only to shareholders but also to the corporate entity itself, and instructs directors to use their powers in “the best interests of the company.”

I admit I didn't even get to the other links.

So - yeah, it's not profit at the expense of anything else, but ... yeah, it's mostly about money. Go take a poll of random shareholders, and ask why they invested their money in the first place. I don't think anyone would be willing to wager against the majority response being "To make a return on my investment. " I won't deny that you would get a range of answers that list things other than just making money, but in no way are activist investors the majority of folks throwing down on Wall St.

If you look up the word Fiduciary in the Oxford Dictionary:



Now, just being an example in a dictionary doesn't necessary prove it true, but ... it's probably not false.

The word Fiduciary has a very specific meaning with respect to finances, but I will admit in general law, it doesn't specifically pertain to finances, just a higher, more general application.

 

[Tempest]

I'll also note:

The first Harvard article is an advertisement for a book, and the second Harvard link is an advertisement for a legal firm.

It does promote a book from a respected law professor, so I suppose it's fair to call it an advertisement, but I wouldn't dismiss it entirely. Some may find (the late) Stout's book interesting.

The Shareholder Value Myth

By Lynn A. Stout, Published on 04/19/13

scholarship.law.cornell.edu

https://www.europeanfinancialreview.com/the-shareholder-value-myth-2/

It's difficult to find quality links that are accessible, which is why I provided several. Nobody is going to read a 50-page article from a scholarly law journal.

The second article states this:

And corporate case law describes directors as fiduciaries who owe duties not only to shareholders but also to the corporate entity itself, and instructs directors to use their powers in “the best interests of the company.”

I admit I didn't even get to the other links.

So - yeah, it's not profit at the expense of anything else, but ... yeah, it's mostly about money. Go take a poll of random shareholders, and ask why they invested their money in the first place. I don't think anyone would be willing to wager against the majority response being "To make a return on my investment. " I won't deny that you would get a range of answers that list things other than just making money, but in no way are activist investors the majority of folks throwing down on Wall St.

I don't think anyone was arguing otherwise. If you read (e.g.) the article by James Kwak (yes, medium.com is mostly clickbait trash), I don't think you'll find anything particularly controversial.