Supply Chain Reaction

What's happening in the electronics supply chain that will change the way business is done? News Editor Suzanne Deffree looks at environmental regulations, RFID, inventory levels, globalization, distribution, and a host of other issues that influence the electronics supply chain.

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Monday, April 28, 2008

AMD should stick to flying coach, not Business Class

What’s a chip maker to do after a horrific 2007 highlighted by design glitches, sagging financial results, the recent loss of its CTO, and MPU market share declines? Why, launch a computer brand and dig into the commercial business PC space, of course!

Well, that’s apparently what you do if you are AMD. The company this morning announced a new initiative “dedicated to developing AMD processor-based commercial desktop and notebook solutions designed specifically for businesses.”

For the full details, see AMD’s press release. But in short, the company has announced commercial stable processors include native AMD Phenom X3 triple-core and AMD Phenom X4 quad-core processors, as well as AMD Athlon X2 dual-core processors. OEMs can go with AMD 780V chipsets or optional ATI Radeon HD 3000 series discrete graphics, and the platform also supports non-AMD graphics and chipsets, like those from Nvidia, as part of this AMD campaign. AMD’s leading with the commercial desktop platform now and will follow with commercial notebooks for AMD Business Class later based on Puma.

A quick glance at the PC supply chain reveals that the business world continues to be strained in terms of IT dollars, with most major research outlets pointing to low-cost consumer models as a more solid source of growth for the PCs supply chain.

“IT decision-makers have a broad range of commercial client solutions to choose from and it is not always clear which systems deliver the best business value,” said Dirk Meyer, AMD president and COO, said in the release.

I really like AMD’s marketing department’s use of the word “value” in Dirk’s quote. What does a “business class” user need with triple- and quad-core speeds? Mainstream business PCs aren’t for gaming, video editing, etc. They are for the un-intensive applications: Word, Excel, and, watch out, the high-speed demands of Outlook! Paying for unnecessary chip speeds isn’t what I would classify as “value.”

Is this how AMD plans to compete with Intel’s Vpro in the PC electronics supply chain, by targeting an ailing market with supped up chips? Sigh, seemingly so; HP, Dell and DMTF (the Distributed Management Task Force) came out in support of Business Class today, which only makes me wonder about their strategies.

AMD should stick to flying coach right now and forget about trying to move up to business class. Get the house in order before launching new initiatives.

Post your comments on AMD and the PC supply chain below.

Reader Comments

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at 4/28/2008 1:26:55 PM, Objectivity Please said:
I think your article miscategorizes this announcement, as you have rather conveniently buried in your missive what is perhaps the most sgnificant point: This offering is a PLATFORM from AMD consisting of AMD cpu's + AMD motherboards. This is NEW. It is not a case of "trying to move up to business class" it is merely one more of numerous steps in the process of becoming more competitive and furhter integrating graphics with processing. Yes, AMD has performed disastrously for more than two years, but these are encouraging signs indeed. Regards.

at 4/28/2008 1:34:18 PM, Objectivity plus said:
Bravo for calling AMD out. Intel's stable platform program which was launched in 2006 has been well received. It is not surprising to see AMD wanting to clone it; however, AMD should really concentrate on the basics of getting its technology house in order. Why is AMD chasing Intel?

at 4/28/2008 2:14:27 PM, azmat said:
I disagree - if we all waited to get the house in order before launching new initiatives we would still be in the stone ages. someone has to take the initiative to jumpstart (provide of course the idea otherwise makes sense). AMD should not chase Intel, it should do a run around Intel. AMD should introduce windows-free processors in collaboration with Google and Apple.

at 4/28/2008 2:24:29 PM, EDP said:
In order to succeed you must take a chance in failing. I am happy to see that AMD is ot a bunch of quiters. Your comments about AMD failures are only relevant to this effort if they have failed to correct the CPU problems. I believe they have corrected their CPU problems. SO LET'S BACKOFF TAKE A FULL BREATHS AND GIVE AMD A CHANCE.

at 4/28/2008 2:43:37 PM, grg said:
Clearly the author is biased and has the facts wrong. In any case I am happy to see healthy competion across all market segments... it is nice to have options to choose from... the world would be a boring place had only one car brand, one tv brand, etc... kudos to AMD for challenging Intel across every domain!

at 4/28/2008 2:57:55 PM, Eyeglass said:
People give Intel too much credit. At the time IBM was making the PC that would revolutionize our lives, it could have gone with a few different CPU options; Whichever CPU maker IBM chose back then would become what Intel is now. If it had chosen something different from Intel, who knows.. maybe Intel would not even exist now (for many many years Intel was underperforming Motorola, but only because it was in a PC did it get as far as it has). This is not a Coke against Pepsi war were we wonder if the imitator is better than the original, Intel did not make itself, we did, or better, IBMs mistake of not taking care better of its design did. AMD had all the right in the world to jump in a standardized design that only benefited one company back then, and we should really be grateful it did (otherwise core-2s would definitely not exist yet). Also, AMD has not been always following Intel like "Objectivity" ignorantly states. Take the 64bit instruction set for example (Intel's version is dead and AMD's is now used by Intel, or did you not know that?). I could list other examples, but that is not the purpose of this comment. We should be wishing AMD the best, if it does not land standing on its feet, we will stay at 45nm production for the next 10 years and pay $500 for the lower end CPUs. Congratulations AMD on a original approach, that is as close to vPro as an apple is to an orange. I wish you the best of luck for all of our sakes (even for Intel fans').

at 4/28/2008 3:15:45 PM, Gumby said:
Intel fans desperately want Intel to kill AMD at once! They are hurting for Intel stock to go back up to 2001 levels in the 70's and higher . Intel fans knew that Intel is suffering from low PE ratios due to relentless AMD attacks for years and years. Had Intel not been slashing prices as a "quality measure" on chips, AMD would have enjoyed profits and funnel them back into R & D department to develop even better designs. Intel hurt consumers by denying AMD the "dollars and dividends" to build better products for consumers to choose . Everyone but rabid Intel fans are drooling asleep.... Are you writing this in your sleepwalk?

at 4/28/2008 4:24:19 PM, Intel-turn-AMD-turn-Intel fan said:
AMD is too complacent with their initial success of the 64-bit processor. They raised the prices and slept thinking that Intel was history. They fell into the same trap as Intel did after its successful launch of the first Pentium. New guys with the same old story.

at 4/28/2008 4:29:20 PM, ABBA said:
As Abba sang "Winner takes it all." Or shall we say "you cannot argue with succes." Whether we give Intel much credit or not is irrelevant. They became the leader not by IBM but by their mannufacturing ability and their marketing strategies (whether fair or not). No I am not supporting the idea that Intel should rule the world. We need AMD for fair competition. Intel needs a competitor to qualify being in a competitive environment. Let's not forget. Historically AMD and Intel have been in many see-saw rides. Unfortunately Intel seems to go up higher each time.

at 4/29/2008 2:32:30 AM, meggaman said:
AMD has historically produced more power per pound than Intel. Remember when AMD introduced the 64, Intel dropped 2 generations of development, just to catch up. Without AMD pushing the frontiers, we would be looking forward to the 486.

at 4/29/2008 3:04:52 AM, Scunnerous said:
You''re really uhh, "out of it" Suzanne! Where do you get the idea that multi-core CPUs are not for business use? Do you enjoy looking at an hour-glass cursor every time you do anything with a PC? You don''t think business needs speed to run the swathes of "managed code" in Vista? No business user should visit web sites which are Flash-infested so that they can get by using a low-speed, single-core CPU? This platform is precisely what AMD needs, and must have, to compete in the PC processor space... with its own chipset, instead of having to depend on the marketing vagaries and technical glitches inherent in depending on chipsets from nVidia et.al. EDN needs to quit beating on AMD, with spurious arguments. Sure, they''ve hiccuped badly over the past year but please don''t deny them the right to put things right.

at 5/2/2008 1:57:28 AM, IntelEmployee007 said:
This is a silly article. AMD is anything but stupid as this article implies. AMD realizes that they can't compete one on one against Intel's latest offerings so they are choosing the path of least resistance; a market Intel is not aggressively pursuing. AMD has to keep the engine running so that it can fuel its development and finally deliver competitive core (no pun intended) products to the market. What would you do? Beat your head up against a wall until the wall breaks (Intel) or you knock yourself senseless trying? AMD will be back and as an Intel employee I look forward to the challenge again. Who knows what we'll do next time AMD shoves us around again...but I bet it will be awesome! BTW - Intel flies coach.

at 5/4/2008 9:20:39 PM, Joe Money said:
The only silly thing about this article are the comments. EEs tend to forget this is a business. Companies like AMD are here to make MONEY, not just chips. Businessman''s point of view: get profitable, or get out. And do it soon, or hand the chip business entirely to Intel.

at 5/24/2008 12:21:22 PM, Greedy people suck said:
Eyeglass, did you also know that Intel used to use AMD to manufacture their chips? Scunnerous: IMO No business should use Vista. It''''s a waste of money across the board, from the cost of licenses to the cost of hardware. It''''s like Win ME - just skip it and wait for the next OS. What''''s it matter if MS stops supporting XP? The only really important one is Critical Updates, but most insecurities patched by those updates can be secured without the patches. Besides, a good firewall and antivirus will catch most attempted exploits anyway. I dread the day either AMD or Intel folds. It will be just like the day Blu-Ray won: prices will jump. Joe Money: True, but looking at it like that cheapens a company and hurts them in the long run. It''s one reason many companies get into financial trouble - they try to please their shareholders at the expense of their customers which is a very bad long term plan. A company can do both, but the shareholders must give the company the TIME it needs to do it instead of always demanding increased profits. Greed - I hate greedy people and greedy companies.

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