$1.25 billion later, can AMD take business from Intel?
Now comes the hard part for Advanced Micro Devices. It has to compete with Intel on the merits of its products.
After settling with Intel and walking away with $1.25 billion, how competitive is AMD's silicon? Some experts weigh in.
Two analysts that follow Intel and AMD said separately that AMD won't be competitive until 2011--at the earliest.
"The only chance for reaching any kind of parity is in 2011. They don't have anything on the roadmap until then," said Ashok Kumar, an analyst at Northeast Securities. In the interim, AMD will get by with about one-fifth of the processor market, according to Kumar. But whether AMD can expand its market share beyond this and be profitable--like Intel--isn't clear. "Intel can leave 20 percent of the unit volume for AMD but (AMD) will have to come up with a business model where it can return to profitability based on this."
AMD may have a chance to expand into more profitable segments if it executes well in 2011, according to another analyst. "AMD believes it's on the cusp of another cycle where they will have strong product offerings compared with Intel. I think this happens in 2011," said Nathan Brookwood, the principal at Insight64. "The products are innovative and have tremendous potential," Brookwood said, referring to the particulars of new chip technologies that AMD disclosed at its analyst day on Wednesday.
But these are big ifs. AMD must close a yawning gap with Intel that's not going to get any smaller because of the legal settlement. "Technically, Intel now has a definitive advantage, which may widen," said Roger Kay, president of market researcher Endpoint Technologies. Kay believes that AMD will have trouble keeping up with the feverish pace, referred to as "cadence," that Intel sets as it moves to each successive generation of chip manufacturing technologies--which, in turn, allows Intel to quickly introduce performance and power efficiency improvements in its processors. "AMD tends to be six months to a year behind Intel," Kay said, citing a statement made by AMD CEO Dirk Meyer at the company's analyst meeting on Wednesday. AMD may begin to close the gap more in the future "but there's no telling whether that will happen," Kay said.
Will AMD's 'Fusion' lead to a resurgence?
(Credit: AMD)And if it doesn't happen, AMD becomes little more than a foil to keep Intel honest. "This settlement is actually proving the very point that Intel wants to keep AMD alive and able to compete at least in some small subset of the market, otherwise Intel will be faced with regulatory issues that they would rather avoid," said Avi Cohen, managing partner at Avian Securities.
AMD's best technology play to avoid this fate is "Fusion," Kay said, referring to a technology that combines the two key processors inside a PC: the main CPU processor and the graphics processor, or GPU. Fusion, however, isn't slated to come to market until 2011, according to the road map that AMD disclosed on Wednesday.
And what about today? Dan Ackerman, a senior editor at CNET Reviews and someone who regularly reviews AMD- and Intel-based laptops, makes an important point about the challenges AMD faces in the here and now: Intel-based laptops not only dominate the high end of the market but the low end, too. "Intel CPUs are found in almost all of the high-end systems (such as Core i7 laptops), and the low-end systems (Atom-powered Netbooks)," he said.
Ackerman said that AMD will be hard pressed to beat Intel head to head. "AMD has some room in to maneuver in the middle of the market--laptops from $600 to $900--but unless they can offer better performance for the same price, or a significant price discount to consumers, it'll be hard for the company to gain additional market share."
Rich Brown, a senior editor for desktops at CNET Reviews echoes Ackerman's sentiment: AMD competes by offering lower prices than Intel, not better performance. "From a tech standpoint, AMD's...desktop chips haven't been competitive since Intel launched Core 2 Duo. Instead, AMD has had to compete on price," Brown said.
The best action plan for AMD is to keep executing on key technologies and hope this eventually translates to market share gains. "AMD is rapidly developing a reputation for timely execution of marquee products/platforms," said Doug Freeman of Broadpoint AmTech in a research note. "AMD revealed that its newer platforms...are on track for [the first half of 2010]," he said, referring AMD's high-end server chip lines.
Brooke Crothers has served as an editor at large at CNET News, an editor at Dow Jones' Asian Wall Street Journal Weekly, and a senior editor at InfoWorld. His CNET blog covers chip technology and computer systems, and how they define the computing experience. He also contributes to The New York Times' Bits and Technology sections. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. Follow Brooke on Twitter @mbrookec. 
I think Intel will still have a bigger problem competing with itself (Atom vs. Core) than anything else. AMD will likely still stay within its marketshare, since their roadmap is, well, all over the map right now - until they get something workable and attractive, they're going to have a hard go of it (says as much in the article...)
With people like you defending AMD's side it's little wonder they are failing. You just come off looking like an idiot.
The market does not put performance above all else. Shady deals leveraging Intel's deeper pockets to keep AMD locked out rule the day. The authors of this article also ignore this proven fact from history.
Its undertandable that AMD can't invest so much in performance when it doesn't get a return on investment for it, and biased reporting like this with big media perpetuating myths about performance and the market doesn't help.
Think about it: the Opteron series was stomping the unholy crap out of Intel's Netburst-based garbage in almost every aspect - for (literally) years. AMD never grasped the opportunities, in spite of running at full capacity in their fabs at the time.
AMD had a huge advantage, and instead of taking advantage of it, they went out and bought ATI and stayed happily distracted with that, while Intel caught up and came up with the Core series of processors.
Instead of immediately buckling down and getting back to business when Intel released Core, they came out with all kinds of really weird concepts, none of which made any real sense. It was like they were throwing ideas against the wall to see what would stick with the public. When Ruiz finally removed his head from his nether regions, it was too late - and when that finally came to fruition, things weren't helped any by Barcelona's public and messy failures, especially in the face of a resurgent (and a suddenly hungry-to-win) Intel.
The 'rebates', 'discounts', 'sticker' programs, and 'co-marketing' stuff? It's standard routine among the big boys - Microsoft does it right now, yet few even bother to complain about that, let alone take Microsoft to task over it (ever wonder why you see Dell's pages splattered with text reading "Dell recommends Windows XP/Vista/7" ? hint: it has a lot to do with their severely reduced license costs). And yet, AMD starts crying foul when its own efforts at doing the very same things weren't as effective... go figure.
I'm not saying this out of any partisanship towards Intel, but because I see what AMD has done to itself, and to be honest, it's almost sickening... they've sabotaged themselves in more ways than any entity should ever be able to and still survive intact. I still have a bit of love for the nostalgia that AMD had provided back in my hobbyist days... it's pretty sad to see them tear themselves apart like this, you know?
They need to get their own house in order before they run off to buy other houses, IMHO...
Nothing is guaranteed but the legal settlement is definitely a big plus for AMD going forward... It's not bad for Intel neither -- Now they have less of a legal headache and can focus more on product R&D rather than arm-twisting their partners.
The bias towards Intel by the writer of this article is blatant, as evidenced by the second sentance of the article. It's Intel that now has to compete fairly on the merits of it's products, not AMD.
AMD's innovations have defined the current state-of-the-art CPU architecture as we know it. They designed the 64-bit x86 architecure. They developed the multi-core die. What has Intel come up with? The Itanium fiasco?
Intel has spent the better part of this decade playing catch-up to AMD. Intel, unable to compete with their "Itanic" projects, resorted to illegal market manipulations.
AMD lost their own market share. They were so blinded by their success with Athlon 64, that they didn't plan/innovate beyond it, which allowed Intel to steam by them with Core technology and 65nm, 45nm die shrinks. Not to mention AMD still has yet to come out with a decent mobile processor that matches performance and power consumption of the Core series.
The Intel laptop runs noticably warmer than the AMD laptop with the same hardware. In addition, since both laptops are high-end with tons of power, the AMD gives about 20 percent longer battery life. Frankly that doesn't make me change my mind. I like my laptop and my desktop as both are.
Performance and benchmarks are different animals. No one can tell nanoseconds, much less milliseconds. So it depends on whether a person wants to spend outrageously for a Quad-Core i7 Intel chip or not for an AMD chip that offers approximately the same performance.
Just my opinion of course.
- by GaMEChld November 15, 2009 12:27 PM PST
- Does anyone else have any information or can elaborate on that bit in the article about Intel gaining access to ATI patents? I hope AMD's not giving Intel a weapon. Right now, Larrabee is a joke. If they utilized Radeon technology to replace it, that would alleviate one of Intel's glaring weaknesses; their horrendous graphics tech.
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- by cloudmatt November 16, 2009 9:25 AM PST
- I doubt AMD would hand over anything too good. heck an old faded drawing on a napkin of a 5 year old low end ati gpu would be a massive help to the steaming pile intel calls a gpu. Intel has lightyears to catch up on to really join the performance/gaming gpu market, their only good use now is on-board vid for diagnostics.
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