Intel Corp. (INTC), Advanced Micro Devices,
Inc. (AMD) salivates at the prospect
of seizing a piece of the soaring tablet market. Two months ago it
launched its Z-Series CPUs (code-named Desna),
targeting the tablet market.
I. AMD -- The Strongest Tablet Challenger?
The design, which weighs in at a modest 5.9 watts, was reportedly rushed out
the door. Work on it began soon after former CEO Dirk Meyer was
ousted. Mr. Meyer had advocated that AMD stay out of the
tablet business -- a key reason why the board decided he must
Just because AMD changed its mind about tablets, though, doesn't make the task
at hand any easier. It must vie with an entrenched ARM architecture,
which of late has been boasting designs with high clock speeds, multiple cores,
and relatively low power consumption.
Still, tablets are inherently graphical endeavor, and AMD arguably has vastly
more experience making high quality graphics hardware than its fellow
the Pacific Crest Securities Technology Leadership Forum in Vail,
Colorado, AMD senior vice president Rick Bergman reaffirmed AMD's commitment to
the x86 architecture, dispelling persistent rumors that AMD would seek an ARM
license from ARM Holdings PLC. He states, "We're excited about what
the tablet market can do for AMD."
II. "Just Say No" to Smartphones
Interestingly, while AMD is enthusiastic about tablets, it's very bearish on
the prospect of smartphones. Mr. Bergman says the company has no interest
at present to make smartphone processors, as the battery demands are too severe
to make a quality x86 design.
This position stands in sharp contrast to Intel who has promised to enter the smartphone
market in a big way, sometime in the near future. The key word is
"sometime" as Intel's smartphone schedule has been pushed back again and again.
In February of this year, at the annual Mobile World Conference Intel was all
smiles and promises, proclaiming that it would have Intel-powered smartphones
by the holidays, which would deliver industry-leading battery life.
Apparently, though, it was counting on Nokia Oyj. (HEL:NOK1V) to come through in a big
way, with the Linux-based "Meego" platform. And apparently it
never got the memo from Nokia that it was going to drop Meego and go exclusively with
Microsoft Corp.'s (MSFT) Windows Phone 7.
Intel CEO Paul Otellini bemoans, "In hindsight, Nokia was the wrong
partner to have picked."
That shift has pushed Intel's launch plans back to "the first
part of next year", according to CEO Paul Otellini. The phrase
"part" is convenient as it could imply quarter or it could imply half
-- its as nebulous as Intel's smartphone plans itself.
One pressing issue is that whatever good thing Intel had in store for this
year, will likely have to be redesigned to keep up with the latest crop of ARM
processors launching early next year. Further there's no real clue on who
will be Intel's operating system partner. Apple, Inc. (AAPL), Google Inc. (GOOG), Research in Motion, ltd.
(TSE:RIM), and Microsoft all stand
firmly behind ARM.
From a broad perspective, Intel's smartphone efforts are akin to trying to jump
on a moving train. And as you can imagine, the task doesn't get easier as
time goes by.
Some would say AMD is selling itself short. Indeed, if Intel can defy the
odds and see a huge smartphone success, that's invariably how analysts will view
it. For now, though, most feel that AMD's decision to wait out the smartphone
market is more a case of knowing ones own limitations, than a lack of ambition.
III. AMD Desperately Needs New High-Performance PC Core
Mobile matters aside, Mr. Bergman's interview also served as reminder of how
desperately AMD needs its new high-power Bulldozer core to
launch and be well received. For all its gains with its popular Fusion
platform , aimed at notebooks and budget PCs, AMD has
seen server sales and sales in the performance PC market languish. Its
server market share dipped from 6.5 percent to 5.5 percent on a year-to-year
basis, and its PC market share managed an anemic growth reaching 20.4 percent,
compared to 19 percent a year prior.
In short, AMD is doing okay in PC sales, because Fusion is doing so well, but it's PC sales could
be doing much better if its performance CPU sales weren't declining.
Further if its server sales weren't declining, it could be growing,
rather than just breaking even.
States Mr. Bergman, "We frankly look back over the last couple of
quarters, we've been disappointed with the results we've seen from our server
businesses as we ceded some market share there."
Mr. Bergman is confident that AMD can deliver, though. He says that later
this quarter AMD will launch Bulldozer-based Opterons, which will
deliver 40 percent faster performance using the same amount of power. If
it can do that, it just might be able to advance its position in the server
space a bit.
quote: Excavators that use a backhoe are sometimes called "trackhoes" by people who do not realize the name is due to the action of the bucket, not its location on a backhoe loader.