Newsmaker: Why $100 computers are on the way

It's been just more than two years since CEO Hector Ruiz unveiled Advanced Micro Devices' new Opteron server microprocessor. To the surprise of some, the company was able to sign up IBM right away to use the new chip.

Winning the race to market with a 64-bit processor was not just a vanity play to impress the computer chip cognoscenti. By hitting the streets first with a 64-bit capable x86 processor, AMD one-upped rival Intel.

It also worked to convince other systems vendors to follow Big Blue and lend their support to the Opteron.

Indeed, to the surprise of critics, who could recite a litany of company missteps over the years, this was not a one-off event. As it geared up for stiffer competition with rival Intel, AMD lined up the likes of Hewlett-Packard, Sun Microsystems and many systems vendors to use Opteron in their higher-end systems.

"I think we're the preferred technology on Wall Street."

But to retain the momentum, AMD needs to stay ahead on cutting-edge chip design. Ruiz is pushing hard to promote the use of the dual-core Opteron and is powering forward with a plan to diversify into new market segments.

CNET News.com spoke with Ruiz about technology trends and what he envisions for AMD chips in consumer electronics. We also found out that Ruiz believes the era of the $100 laptop PC may be on the horizon.

Q: When you look back over the last two years, since Opteron's introduction, what's your assessment?
Ruiz: We had a lot of expectations and dreams and hopes and goals...and all that. Considering...that there was a lot of trepidation (by) customers to even just show up--obviously the fear of Godzilla was very strong--when I think what we've done in the last two years, I'm really pleased with the progress.

It's pretty clear the enthusiasm of the OEM (original equipment manufacturer) community of what this technology is doing for them is pretty high. And also our expectations of being able to penetrate an almost impenetrable segment of the market back in those days--I'm real happy with where we are.

What was the company's original goal?
Ruiz: Our hope was that by the end of 2004 we'd be at 10 percent of the market on the server side. We were just slightly short of that, according to IDC. But in the grand scheme of things, we feel pretty good.

Looking ahead, what are AMD's other goals?
Ruiz: When we set out two years ago...the decision we made was to sort of flip the company upside down in terms of priorities. We felt that the server/enterprise segment was incredibly important for us. It's a very lucrative segment of the market for us to participate in...and it's aimed right at the belly of the giant. We felt that we needed to demonstrate to the outside--particularly to the enterprise--that we were very capable of doing that, which was the hardest thing to do.

I don't think a $100 computer is out of the question in a three-year time frame.

We set out to have a long-term strategy to become very relevant in that space, so that over a period of time, the enterprise would see two very strong players, as opposed to two years ago, when there was only one.

What did that involve?
Ruiz: Part of that revolves around having a very strong technology road map and a very strong product road map--which we believe we have. I think the introduction of dual core is one of the steps that continue to demonstrate to (business customers) that this is a long-term commitment we're making to the segment and that this is a very high priority.

Look at the benchmarks and the data coming out of our customers. The dual-core product indicates we have actually widened the gap in terms of leadership. I feel this will continue. Our plans are to continue to out-innovate, in a customer-centric way, the technology and products in the server segment. That, combined with our strong partnering with customers, which I believe is getting stronger and stronger, will lead us to (become) a very relevant player in the enterprise (market).

When do you think AMD chips will make it into the mainstream servers, desktops and notebooks that huge corporations buy? Ruiz: The server part of it is happening as we speak. We're already in a fairly significant part of Sun's, HP's and IBM's business, as well as Fujitsu-Siemens, Lenovo and others outside of the United States.

We expect to start seeing, for example, dual-core desktops before the end of the year being fairly active in the marketplace. There, though, I have to tell you that we have to make sure that the consumer understands the value. For a number of consumers, it'll take some time before the software and all the things that will make dual core really great will actually play out.

We're surprised we haven't heard more about big companies, such as banks, adopting Opteron. Do they just not talk about it?
Ruiz: There's a little bit...of cautiousness on the part of banks. If a bank were to talk about the fact that they committed to use AMD technology, that could be interpreted--especially if it's an investment banker--that they were actually endorsing AMD stock, which can be confusing.

I think we're the preferred technology on Wall Street. Frankly, if you talk to any of the Wall Street firms, they'll tell you that they like what we do,

More Newsmakers

[pcLoadLetter]

It is possible IF

people can get coaxed away from the unsecure, bloated POS known as the windows operating system. With windows, double or triple that $100 price tag.<br /><br />Funny how hardware get faster and more powerful, yet cheaper and windows get buggier, more bloated, slower and more expensive over time.

[catchall]

Ya right

Double or triple? What are you talking about? You can get new desktops for $300 from Dell, so your telling me that now, at this time, hardware is free and the cost of that low end Dell is just the Window?s OS?<br /><br />No, no. Large manufacturers don?t pay anywhere near that, so neither will the end user. I?ve heard guesses of $40 a license for big shops, but have seen nothing to back that up.<br /><br />But you are partially correct. MS will have to lower the cost of the OS if it is to be a part of the $100 PC. And I think they can do it, hoping to sell services and add-ons down the road.

[Kevin Baron]

AMD

It's sad that AMD has the fastest chips yet the have the lowest market share. Dell should play ball and jump on board. The fact is that there are many people out there who want a Dell/AMD PC. Dell is considered(because it is),the top dog in the PC industry. If they backed AMD the world would follow. I dont know anyone who is a Intel loyalist. I do however know many AMD loyalists.

[highlander2000]

Uh

There are plenty of loyalists for anyone and anything, methinks. I know people who would never buy an AMD computer if they didn't have to because they feel AMD's low market share is an obvious sign of total inferiority.<br /><br />AMD does make good advancements in chip architecture, like the jump to Athlon and then Athlon XP and then Athlon 64. I think they really need to pump up now in the area of multicore chipmaking.

[bammike]

Here's one!!!

I am a computer tech, and an Intel loyalist. I come across nothing but problems with the cheap AMD processors and the boards they are installed on. Particularly when I see a K6-2 processor on a machine, I want to flee. It is a shame this countries manufacturers try to aim for cheapest with no regard for quality. Yes, the word is QUALITY. The old addage that you get what you pay for does not always apply, but in most cases it does. This is one of them.<br /><br />Mike

[hatandglasses13]

This is horrible

Great, $100 PC's so that people who don't know how to use <br />computers buy them incredibly cheap and then they don't work <br />for anything other than solitaire on a good day. <br /><br />What is wrong with the PC industry? Instead of making <br />computers that work, let's undercut prices so everyone hates <br />technology.<br /><br />Brilliant.

Software, Baby!

We need smarter programmers and better compilers. End of story. <br /><br />Many things in our society undermines and punishes software purists.

Bottom of the pyramid

If you can sell a PC/network appliance at $100, you'll reach a market of a billion. Also, you'll face little competition from those that currently dominates western hemisphere deskptops and homes.

[momule]

absolutely

most folk that I know that are computer deprived are only so because the cost is that of a new fridge. Give them a 100 dollar device that does what most people do: internet browsing, email and simple word docs, and you'd sell a million the first month.