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AMD thinks things will turn around in the second half of 2009

AMD has posted its financial information for Q2 2009 and has reported yet another loss. The silver lining to the quarterly loss cloud is that the financials showed some improvement over the previous quarter. AMD also remains optimistic about Q3 and the rest of 2009.

AMD will be releasing new platforms before the end of the year that the chipmaker hopes will help turn its fortunes around. The company will be releasing its new Opteron processor servers, a market that AMD is still very competitive in, and will releases new notebook platforms.

According to EWeek, CEO Dirk Meyer notes that AMD worked on controlling costs in the first half of 2009 and that the cost controlling methods are expected to pay dividends in the second half of the year. Perhaps the largest of those cost-controlling methods was the spinoff of AMD's foundry operations into an independent company.

Meyer said during a call with financial analysts, "With a strong flow of new products and a leaner cost structure, coupled with assumption of modest seasonal growth, we are positioned for a stronger financial performance in the second half of this year."

Among the new platforms for notebooks that AMD intends to let loose onto the market in Q3 2009 are the Tigris platform for mainstream notebooks and an unnamed platform that is aimed at thin and light notebooks.

AMD reported a loss of $330 million for Q2 2009 amounting to $0.49 per share with revenue for the quarter of $1.18 billion. Analysts on Wall Street had predicted a loss for AMD of $0.47 per share with revenue of $1.13 billion. Despite the loss for the quarter, the numbers AMD posted looked better compared to a year ago.

Analyst John Spooner told eWeek, "The chip maker, like its rival Intel, showed sequential improvement in revenue," Spooner wrote. "Unit shipments fared reasonably well, with some improvement in the server space. Thus there are signs that point to AMD's business improving and the company marching toward its goal of becoming profitable (at least on a quarterly operating basis) in the second half of the year."

AMD rival Intel did well for the quarter until the massive EU fine was deducted making for $398 million loss.

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AMD mid-range products
By themaster08 on 7/22/2009 11:55:04 AM , Rating: 2
When I build/buy my computers, like many people I know, I usually go for mid-range/high-end components which will allow me to get several years good use out of before building/buying a new system. The brand name of the chip is completely immaterial to me. I want to get the best for my money.

Because of this, I bought an Intel Core 2 Quad processor with my last build around 2 years ago. This was when AMD didn't even have a quad-core processor available.

It seems to me that ever since the release of the Core 2 architecture, AMD processors have only been an appealing choice when it comes to the lower-end of the market. I've always found AMD to be unprecidented in price/performance of the low-end segment. But I find that a larger percentage of people tend to be in the mid-range market, because like me, they wish to get several years out of their system, so ultimately, AMD did not look like a good choice at the time.

With the Phenom II line of processors, AMD look like a very appealing option when it comes to the mid-range section of the market. If I was to build a computer right now I would give the Phenom II lineup serious consideration.

Appealing to the mid-range segment again is what is helping AMD out of the mess they were in with the original Phenom processors.

RE: AMD mid-range products
By smackababy on 7/22/2009 3:26:31 PM , Rating: 2
What AMD really needs right now is something that runs great in lowpowered netbooks. An Atom killer would almost be as big of a game changer as Conroe was for them a few years back.

RE: AMD mid-range products
By phazers on 7/22/2009 4:05:23 PM , Rating: 2
What AMD really needs right now is something that runs great in lowpowered netbooks. An Atom killer would almost be as big of a game changer as Conroe was for them a few years back.

And you can thank the dearly-departed Hector Ruinz for canceling just such a potential product - Bobcat. AMD has lost years of competitiveness with that short-sighted stunt.

RE: AMD mid-range products
By TomZ on 7/22/2009 4:57:18 PM , Rating: 2
I don't see how AMD could really afford to branch into a new market low-end netbook processors when they are falling short with their core product. Maybe Ruiz was right?!?

I would personally be more interested in a different approach to attacking Atom: Suppose ARM was able to convince (e.g., pay) Microsoft to support Windows on some of the higher-end ARM application processors? They could really give Intel a run for its money. After all, the only advantage that X86/X64 has is that it runs Windows. Take that away, and the processors are forced to compete on their own merits.

RE: AMD mid-range products
By GodisanAtheist on 7/22/2009 6:04:32 PM , Rating: 2
There is no Business Bible that says you can't branch out into a growing market because your core market is stagnating. In fact, that sounds like a good recipe for year to year losses...

AMD has almost no presence in the laptop market, so what would they have to lose from offering up a competitor to the Atom? Unlike Intel, who fears the Atom will cannibalize their high-margin laptop offerings and thus places ridiculous limitations on the platform, AMD would come no strings attached.

Actual competition in the netbook market @_@ more money for AMD and some uniquely spec'd netbooks! Everyone wins! Except Hector. Hector can burn.

RE: AMD mid-range products
By rippleyaliens on 7/22/2009 6:59:29 PM , Rating: 2
AMD, lost my business on just 1 act.. When AMD was spanking Intel, AMD kept their prices INFLATED, and didn't offer anything new for years. (Athlon Days) .. Once Intel released the Core2 architecture, AMD has been playing catchup, and loosing.. Sure AMD on a $$ scale is a good fit, When comparing the sub $150 cpu, amd just ROCKS.. BUT $151 and above, amd is playing catchup, and loosing. AND Fellow techies,, remember this. a $400 system is just to turn on, and do some basic stuff.. $1000 is still a sweet spot for a computer. Not even counting games, and such.

AMD rode that Athlon for years.. no innovation, gouging prices, no discounts, nada.. INTEL even with the core 2, EVERY SINGLE FEBRUARY, you could count on INTEL like Clock work to discount their cpu's... AMD does it out of desperation, Intel does it out of their business model.. LOVE/HATE INTEL, you have to give it to them, they innovate, and innovate.. Some products are horrible, some just ROCK, but they are a Solid business, and releasing new stuff, CONSTANTLY, not when it needs to make $$$

In 2 years, AMD will prob have the big dog cpu, but until then, PURE Techies, the ones that have a need for SPEED, will go with whats the fastest, not name brand.. AMD Fanatics remind me of CAR fanatics,,loyal to 1 brand, yet that brand cares less if ya buy theirs or not.

RE: AMD mid-range products
By Targon on 7/23/2009 7:25:58 AM , Rating: 2
I don't think you understand the expenses that come from continually having to do research and development to release faster products every few months. If the cost of manufacturing plus R&D costs is less than the amount that a company can bring in, the company loses money.

Now, these days, we are very familiar with cheap chips being everywhere. The cost of manufacturing has dropped due to process improvements, and the fact that AMD has to keep prices low to be competitive with Intel is the ONLY reason why we see cheap chips. It makes NO sense to sell the fastest performing chip on the market for less than the cost your competitors are selling their chips. Keeping the prices reasonable is one thing, but making them cheap only works if you can sell enough volume to make a good profit.

Now, Intel has the manufacturing capacity so they can make many more chips than AMD, but Intel was illegally reducing or keeping AMD chips from being used or supported back when AMD really had a better product. This means that even if AMD had the manufacturing capacity to satisfy demand back when they were in the lead, Intel was there forcing computer makers not to sell too many systems with an AMD processor for risk of being cut off from supplies of Intel products. With fewer sales, AMD would also be forced to aim for higher margins on the chips they COULD sell(due to demand).

I remember the days leading up to the release of the original Athlon. Asus wanted to support the new chip, but was concerned that Intel might cut them off. Asus was selling their first AMD based motherboard in a plain OEM style box with no art and no hype surrounding the product as a result. There was demand, and the K7M was well received, but it still was subject to being unadvertised by Asus to try and avoid getting cut off from Intel. Why should a motherboard manufacturer be afraid of releasing a motherboard under a lot of hype(the way any new product normally would be)?

So, prices were higher back was EXPECTED for the highest performing product to be at least as expensive as the competition is selling it's products. AMD has switched tactics since those days to sell in volume because AMD now has the ability to make enough chips to satisfy the demand.

Have you ever heard of Intel dropping prices on the high end parts, except when AMD has a competitive part that forces them to?

"Nowadays you can buy a CPU cheaper than the CPU fan." -- Unnamed AMD executive
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