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AMD's Board reportedly kicked Dirk Meyer out of the CEO spot for refusing to pursue the tablets and smart phone market.  (Source: ITP Images)
Board thought CEO wasn't pursuing developing mobile CPUs aggressively enough

We know that Intel is feeling the pressure to deliver in the tablet and smartphone sectors, after having lagged in its response and allowing ARM CPU makers to establish a dominant position.  But apparently Intel's perpetual competitor in the personal computer CPU market, Advanced Micro Devices, was also feeling the heat.

According to a report in The Wall Street Journal, AMD ousted CEO Dirk Meyer because he lacked a convincing strategy to move the company into the tablet and smartphone space.

The move had seemed unusual, as AMD was doing well with its graphics offerings, was finally ready to deliver its first "Fusion" CPU/GPUs, and is on pace to deliver chips with its latest desktop core architecture, Bulldozer, around mid-2011.  Despite all of that, it was mobility that appears to have been the overruling factor when it comes to Mr. Meyer's employment.

The move took investors by surprise and they responded by beating AMD's share price downward.

Mr. Meyer had in the past seemed almost defiant, according to sources, in his opposition of entering the mobile market.  During a new conference at the 2011 Consumer Electronics Show, he stated, "While there are a lot of units there, the revenue is smaller."

AMD's board is composed of industry veterans -- Bruce Claflin, former CEO of network gear maker 3Com Corp.; Robert Palmer, former chief at computer maker Digital Equipment Corp.; and Craig Conway, former CEO of PeopleSoft Inc.  Still one has to wonder if they're making a wise decision throwing out a CPU-savvy CEO and going for someone with less experience, but more of a lust for mobility. 

Stacy Rasgon, an analyst who spoke with Chairman Claflin, comments, "They are looking for a visionary, and casting a wide net... [The next CEO will] not necessarily have semiconductor experience."

Dirk Meyer had been making an annual salary of $950,000, plus a "target" annual bonus of $1.9 million, according to Veritas Executive Compensation Consultants LLC.  They estimate that his severance package was $8.55M USD in cash.  An AMD spokesperson, Drew Prairie, gave a slightly higher estimate of $18M USD.

One of the candidates reportedly being considered to be Mr. Meyer's replacement is Apple's COO Tim Cook.



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I have to agree...
By Marlin1975 on 1/12/2011 10:45:24 AM , Rating: 5
with the CEO. There is not a lot of money to be made in those areas and even Intel and its billions can't even get into those areas very well. Why spend money on something that is not even proven longterm, tablet, with what little you have. AMD needs to focus on its core business and not lose sight. No whonder the stock took a beating.

That and did not AMD sell off its ARM and small cpu parts years ago?




RE: I have to agree...
By Da W on 1/12/2011 11:01:47 AM , Rating: 2
They just finished Bobcat and it's still to big to fit in a tablet, they missed a great opportunity.


RE: I have to agree...
By UnWeave on 1/12/2011 1:56:30 PM , Rating: 2
Perhaps, if Bobcat was an ARM architecture. x86 tablets won't be a big thing (if at all) until Microsoft makes a decent touch UI for [some variation of] Windows 7 (a touch-centric OS based on Windows Phone 7 seems a better idea IMO, but that would mean ARM anyway). Bobcat will be competing in the netbook/ultraportables space. Trying to make it fit into a tablet would be a wasted effort, for now. The market is tiny.


RE: I have to agree...
By vol7ron on 1/12/2011 7:22:16 PM , Rating: 2
I think there's money in it. Mobile tech is replaced more freq then desktops. And more and more ppl are getting "smart" devices. Who knows how much longer desktop performance can keep consumer interest.


RE: I have to agree...
By Targon on 1/12/2011 10:05:45 PM , Rating: 2
The problem with the ultra-portable space is the cost in R&D vs. profit margin. How much R&D money would it cost to really get into the cell phone processor market with enough market share to make a profit? Then you have to focus on R&D, which AMD has enough of a problem with at the moment in their core CPU and GPU businesses.

Yes, there is money to be had, if you have the rights to make an ARM compatible chip and already have a product ready to go.

Look at it another way, why do you think you see NO commercial competitors for MacOS or Microsoft Windows? Linux is out there, but do you see any real move to go commercial on the desktop in a way that would really compete in the retail space?

Netbooks with Linux tend to do poorly when it comes to user satisfaction, unless the buyer already is familiar with Linux in the first place and WANTS a Linux based machine. Your average consumer generally is not satisfied with Linux based netbooks.


RE: I have to agree...
By vol7ron on 1/12/2011 10:45:11 PM , Rating: 2
I see RedHat commercials all the time :) The problem isn't $$, the problem is support. While open source is great, it is generally supported by motivated individuals that are either independently wealthy or just doing it for fun - in most cases they don't want to keep to a schedule, they want to do it on their own time. It's a pro bono thing.

I agree that R&D costs a lot, but the barriers to entry are so high that only a few chip designers can scale into there, which means you win big or lose it all (generally due to marketing). I think AMD/ATI is setting itself up nicely with the SoCs. I think the Board just needed to give it a little more time and wait for their practices (read:R&D) to mature.

The move I would make, as others may have said, is working on your production line relationships, like HP and Dell. Get a product that makes a name for itself before anyone else. If I were AMD - I'd work with Adobe and get a camera that could run some Photoshop macros (default or imported from the computer) on the camera. Think of it, better tanning filters, background replacers, professional snapshots made almost instantly. I don't know, there's more options than just phones and computer-like products.


RE: I have to agree...
By AlphaVirus on 1/12/2011 11:11:20 AM , Rating: 2
I wouldn't say there is not a lot of money in those areas because it's currently why Apple is pushing forward so fast.
Right now 'mobile' is the market to be in, people want tablets even though there is currently little purpose over a laptop. People want faster and better cell phones.

Honestly I wish they didn't make such a brash decision because AMD is about to make large waves with Fusion and Bobcat. I think they would be better trying to pursue agreements with companies like Dell to actually support their platforms. I view Dell's business line and server line and sigh because there isnt a single AMD sticker on anything.

I can't wait to see who fills this position, whoever it is better come in aggressive.


RE: I have to agree...
By michael2k on 1/12/2011 3:36:33 PM , Rating: 4
You misunderstand.

Apple is taking a $13 part and selling it in a $500 device.

AMD would therefore have to fight to sell it's CPU for $12; not exactly a winning proposition.


RE: I have to agree...
By OBLAMA2009 on 1/13/2011 5:41:32 AM , Rating: 2
i dont get it either. the tablet chip market is low margin and very crowded already. theyre already behind in the x86 race, they should be investing in that battle.


FIRE THEM ALL !
By Soulkeeper on 1/12/2011 12:15:33 PM , Rating: 5
The board of directors should be fired too.
Not like they are "visionaries" or contribute anything meaningful.
So now these morons will select a puppet to replace Meyer and continue driving the company in the wrong direction.




RE: FIRE THEM ALL !
By Amiga500 on 1/12/2011 2:07:51 PM , Rating: 2
Correct.

Idiots.

Unfortunately for us, we'll reap what they've sown.


Ousted
By ElFenix on 1/12/2011 4:38:09 PM , Rating: 2
Not outed. "Report: AMD CEO Dirk Meyer Was Outed Over Tablets, Smartphones"

Do the editors have to preview before they post?




RE: Ousted
By BernardP on 1/13/2011 10:38:16 AM , Rating: 2
Exactly. For example, he would have been outed if he was a closet gay.


It's possible but...
By tech329 on 1/12/2011 12:34:09 PM , Rating: 3
To get into the mobile marketplace and actually make money you have to do one of two things. Dominate on the hardware side or offer a very compelling overall package of hardware with marketing / software / apps /dev support.

AMD wasn't in any position to do either of these without spending an awful lot of money with a huge risk. It isn't going to be that long before there'll be a shakeout in this marketplace. There is growth potential but it'll even out sooner than later and you can expect some cannibalization along the way. AMD / ATI /Global Foundries already had plenty on their plate and as a practical matter didn't have the resources to go after the mobile market as well. Not in the way required to give a decent chance of success.




Stupid
By Belard on 1/12/2011 10:54:22 AM , Rating: 2
AMD = STUPID move.

No reason to keep the guy and STILL move more into mobile space.

The concept of AMD wanted to be bought out by ATIC? (the Dubai group who owns Global Foundries) is are more realistic.




By Taft12 on 1/12/2011 11:28:26 AM , Rating: 2
quote:
AMD's board is composed of industry veterans -- Bruce Claflin, former CEO of network gear maker 3Com Corp. ; Robert Palmer, former chief at computer maker Digital Equipment Corp. ; and Craig Conway, former CEO of PeopleSoft Inc.


Those guys may be industry veterans, but all their companies were swallowed years ago (over a decade for DEC).

A sign of what's to come for AMD?




This is absolutely crazy...
By jharper12 on 1/12/2011 1:57:53 PM , Rating: 2
From the board, "Dirk, sorry buddy, you've got to go. You just aren't focused enough on the mobile markets. It's not you, it's us. We're just going in two different directions at the moment."

Meanwhile, I'm buying a Thinkpad x120e the moment it's available. It'll be my first AMD notebook (Zacate rocks), because it's the first compelling mobile offering AMD has ever had as far as I'm concerned, a matter of opinion. How does this make sense?!?!?!

Get rid of the entire board. Seriously, we get it, mobile is a big deal. But it's also about to become an even more insanely competitive market with lots of players. AMD can use that to really carve out business in a few niche areas and remain profitable. Then, once the dust settles, jump into the right area of mobile development without losing billions in a gamble.

Intel's strategy is different, they make their money by being on the bleeding edge at all times. They have to go all in, or they risk their differentiating business strategy. Don't follow Intel! That's like some idiot off the street buying GE after Warren Buffett picked up some GE stock. The difference? Buffett was guaranteed a 10% return. If you're not entering the market with the same footing, you can't expect the same returns.

Intel has planned for years to eventually make Atom's TDP low enough for tablets and phones. AMD has thought for years that doing something similar would be a good idea. Having a clear plan years ago gives you an edge in this fight, but if you didn't have that plan, or haven't stuck to that plan, then now the best move is to wait for a strategic opening. There will guaranteed be losers in the mobile markets in the next few years. Wait for them to lose and free up some space for competition.




Interesting..
By Ben on 1/12/2011 7:09:09 PM , Rating: 2
So one could draw the conclusion that the board is looking for someone more greedy, like Hector Ruiz.




You know why?
By AntDX316 on 1/13/2011 3:19:53 AM , Rating: 2
Because he has to lie to convince why his products, AMD, is better than Intels. Possibility of fraud and growing negative energy on his conscience for the fake his competition, Intel, is far superior is the reason he had to retire.




he got outed?
By OBLAMA2009 on 1/13/2011 5:38:03 AM , Rating: 2
what did they do, catch him tapping hector ruiz's feet in the bathroom stalls?




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