As if Intel Corp. (INTC)
needed any more bad news after all
the grief ARM Holdings plc (ARMH) is
giving it, it appears that Advanced Micro Devices, Inc. (AMD)
may be closing the gap in notebook and netbook sales.
Late last month, Microsoft's Bill Koefoed, general
manager of investor relations, reported "a
40 percent decline in Netbooks" in Q1 2011. In Q1 2010, netbooks
sold about 10 million units, so this indicates that about 6 million netbooks
sold in January, February, and April. If that pace were sustained,
through May around 10 million netbooks would have sold.
AMD's Raymond Dumbeck announced this week
that AMD sold 5 million "Fusion"
chips in the first five months of the year. AMD's Fusion
chips went into a mix of 10-, 11-, and 12-inch notebooks. Given that the
line between a "netbook" and "ultra-portable
PC"/"small PC" lies somewhere in 11-12 inch range it seems like
a fair guess that A.MD sold about 3 million "netbooks" -- or about a
third of the total market (~10 million units)
That's incredible news for AMD which traditionally
had little sales success in the mobile sector and virtually no sales in the
The flip side of the AMD victory is that Intel's
ultra-mobile Atom processor appears to have bled a great deal of market share
in a very short time. Atom has suffered as AMD reportedly undercut it
with Fusion and delivered a superior on-chip GPU compared to Intel's solution.
Intel's only saving grace has been that the rush
to Fusion has taken AMD somewhat as surprised. Mr. Dumbeck comments that
the company is currently sold out of its existing stocks. That shortage
slowed sales from approximately 3.9 million in the first quarter to a mere 1.1
million the next two months.
That brief reprieve for Intel may be short-lived,
though. AMD is reportedly working to increase shipment of existing Fusion
processors, as well as widening the channel to include new models.
AMD's current Fusion CPUs fall into the Brazos family,
which feature the company's new mobile Bobcat core. They are
split between Ontario, which features lower power consumption
and lower clock speeds, and Zacate, which features slightly higher power
requirements and clock speeds. Both Brazos flavors
are built on a 40 nm process.
The company is preparing to ship a
new type of Fusion "advanced processing unit" (APU) codenamed Llano.
Llano packs a beefier K10 core (found in the Phenom
II and Athlon II processor lines), but a die shrink
to 32 nm should help to mitigate the power bump, slightly. The processors
are expected to come in dual core and quad core varieties and fall between 25
watts and 100 watts in power consumption.
Intel doesn't exactly have a new processor that
can compete at the same market point as Llano.
Atom will be much weaker than Llano. Sandy Bridge will be
much more powerful, but will also be more expensive. The lack of a
mid-market CPU offering from Intel should help Llano see
strong sales when it begins shipping early next month.
Brazos has clearly exceeded AMD's
wildest expectations. With support from Dell Inc. (DELL),
Sony Corp. (TYO:6758), Acer
Inc. (TPE:2353), Hewlett-Packard
and Lenovo Group Ltd. (HKG:0992) AMD's
Fusion project is seriously threatening Intel's netbook and notebook processor
With 28 nm enhanced Bobcat 1-4
core models and 32 nm 2-4 core Bulldozer based models due out next
year, AMD clearly hopes to continue to apply the performance pressure on
Intel's Atom line and pricing pressure on Intel's Sandy Bridge line.
As with its success
in the GPU market, AMD's turn-around owes to the company shifting its focus
to the consumer budget and mid-market sectors, versus the traditional
enthusiast race that it has waged versus competitors in the GPU and CPU
markets. A company focusing on the majority of consumers, versus a select
few? What a novel thought! But it sure appears to be working for
quote: They think with logic, not emotions.
quote: The OEM's are not going to buy a poor mid range component just because that company has the best high end.