Updated at 9:00 p.m. with additional comments on Netbooks at bottom.
In case you missed it, Advanced Micro Devices is passing on Netbooks. At least as Intel and its partners have defined the category.
In fact, a lot of the media outlets missed this point completely, insisting that AMD is going to go head-to-head with Intel on Netbook processors--apparently because it satisfies a journalistic boilerplate that AMD must, just must, have a direct response to Intel's Atom.
Just to set the record straight, here's what AMD Chief Executive Dirk Meyer said Thursday: "We're ignoring the Netbook phenomenon--just thinking about PC form factors above that form factor."
I think that is a pretty unambiguous statement. But if that wasn't clear enough, here's what Bahr Mahony, director of notebook product marketing at AMD said: "We're going to offer the Congo and Yukon platforms as an alternative (to processors and chipsets for Netbooks). There are a fair number of people that are not satisfied with the experience they're getting on these mininotebook platforms." (AMD uses the terms Netbook and mininotebook interchangeably.)
(Note that AMD has also said it will not enter the market for mobile Internet devices, or MIDs, another sign that AMD is pursuing a different course than the one Intel has charted with Atom.)
In an effort to underscore his doubts about Netbooks, Mahony added that the dissatisfaction with Netbooks "has been exhibited by the high return rates that have been seen on these mininotebooks" in Europe.
Asus or Acer may have something to say about that, but at the very least, this offers a fresh perspective on this possibly overhyped category.
And AMD spokesman John Taylor said Thursday that AMD is specifically not targeting Netbook designs. That is, those designs with an 8- to 12-inch screen.
AMD's strategy seems solid, in my opinion. Go for a segment that is bigger and better than Netbooks. The ultraportable category (the MacBook Air being the best example) is full of attractive but expensive designs. Why not work with PC makers to offer an ultrathin, ultralight, full-featured 13-inch notebook that is priced a lot less than $1,800? Why not $600 or $700?
In addition to the conventional criticism of Netbooks (small screens, tiny keyboards), an underrated fact is that many users eventually get the feeling that they're stuck with an underpowered laptop.
And being underpowered often hinges on lackluster graphics. In a conversation Thursday with Pat Moorhead, vice president of advanced marketing at AMD, he pointed to the graphics capability of AMD's upcoming Conesus CPU, which will use ATI's RS780M graphics: better graphics and better user experience overall.
The MacBook Air offers probably the best proof of this thinking. Apple (which, if you haven't noticed, doesn't offer a netbook), originally went with Intel's integrated graphics in the Air, but due to customer dissatisfaction with graphics performance, it added Nvidia GeForce 9400M graphics to its newest models.
Delivering a more powerful dual-core processor (such as AMD's Conesus) for this segment would also turn some heads and offer a more full-featured experience. Intel will be the first one to tell you that Atom is underpowered for many applications.
Are AMD customers clamoring for Netbooks like Intel customers are? "Frankly, I don't get the same answer when I talk to the customer base," AMD's Meyer said Thursday. Time will tell whether the CEO's strategy is right, but it offers a well-thought-out alternative to the Netbook as we know it.
As a point of clarification. A Netbook is not a thin notebook. AMD has stated it will pursue the latter market. (Whether this pans out or not is another question. Consumer tastes and time will ultimately dictate the form factor.) Thin notebooks are typically full-featured with relatively large 12-, 13- or 14-inch screens. Netbooks, by contrast, are tiny in size (just visit a Best Buy: Asus Netbooks are almost invisible next to a standard notebook) and use low-power, low-performance Atom processors. The Netbook category now exists because of the stark difference in form factors (and price). And the market has borne this out. The Netbook category is defined, to a large extent, by the Atom processor, which is architecturally very different than the Yukon and Congo platforms that AMD will launch. That's why CEO Meyer and others at AMD are going out of their way to draw a distinction between Netbooks and the type of design that AMD will pursue.