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Advanced Micro Devices may have been demoted on Dell's Web site (though three AMD-based notebook models are still listed). But its chips aren't collector's items yet.

A quick inventory of Best Buy, the largest U.S. electronics retailer, is telling. A search on the reseller's Web site greets you with a page full of AMD-based notebooks. Ten to be exact. Some are fairly attractive too. Many are models in Dell's svelte Inspiron line. (Correction: not Dell's XPS line). Granted, Best Buy may not have the turnover of Dell's Web site but it's not Radio Shack either.

HP dv9715

(Credit: Best Buy, AMD)

Then there's Hewlett-Packard. If the perception is that AMD is fading at Dell, that's not the case (at least not yet) at the largest PC supplier in the world. "AMD represents a good value from a price/performance ratio," an HP spokesperson said.

In addition to the AMD-based notebooks available on HP's home-and-small-office site, a crush of systems is listed on Best Buy. If you're keeping score: AMD 9, Intel 4. Go to Staples online, and it's nothin' but AMD in HP.

And let's not forget Toshiba. In addition to listing seven AMD-based notebook on its Web site, almost half the Toshiba notebooks at Best Buy use AMD chips.

What about the brick-and-mortar Best Buy? At a Southern California Best Buy (just south of Orange County), there were 34 notebooks on display. Exactly half (17) of these used AMD chips (mostly dual-core Turion processors). And most of the AMD systems were placed at the front where people browse. But here's the catch. The salesman was pitching Intel. He volunteered that Intel's Core 2 beats AMD's dual core. "Intel runs cooler too," he said. And he had nothing positive to say about AMD. That's a problem.

Which brings us to another problem AMD may face. Last fall, Intel CEO Paul Otellini said in a conference call that his company has "walked" away from "a lot of low-end business" in mobile and desktop because it's not profitable. This is a real danger for AMD: getting relegated to the budget bin where profit margins are typically thin. (Many of the AMD systems are below $900.) But that story--whether AMD's profit margins are in fact razor thin or not--will be told in upcoming earnings statements.

The bigger problem may be Intel's Silverthorne and its low-cost x86 derivatives. These chips are designed specifically to compete at the very low-end--and make money there--unlike current Intel processors. Though nobody knows at this point whether Silverthorne will be competitive or not, its mantra is worth noting: low cost is good. "Because they are so small, literally thousands of them can be cut from 300mm wafers at 45nm. Thus, their economics are incredibly good," said Roger Kay, an analyst at Endpoint Technologies Associates.

And Otellini said more or less the same thing during Intel's fourth-quarter conference call. "We're embracing this trend with Silverthorne and will take the pricing down even lower...A tailored product for ultralow cost notebooks is a new thing for us," he said.

LAS VEGAS--After giving what we would describe as a visionary and even entertaining keynote address at CES on Monday, Intel CEO Paul Otellini carved out some time to answer questions from a small group of reporters. When it comes to tech CEOs, Otellini has been somewhere between Steve Ballmer and Michael Dell on the openness scale, though definitely much closer to Ballmer. So it was a little surprising that when we asked a simple question about Vista, Otellini pleaded the Fifth.

Intel CEO Paul Otellini makes a point with reporters at CES in Las Vegas.

(Credit: Corrine Schulze/CNET News.com)

Noting that Bill Gates had said during his Monday keynote speech that there are now 100 million people using Vista, we wanted to know whether Intel considers Vista a success in driving PC upgrades--or was 100 million installs simply a reflection of the market's growth rate? In other words, after five years in development, was Vista having any impact on moving hardware, and by extension Intel processors?

Before the question could even be finished, Otellini shook his head and said, "no," he was not getting into any discussion about Vista.

We considered that not just odd, given Otellini's history of taking on all questions, but a sign that Intel is seriously displeased with Vista. If that weren't true, why couldn't the CEO muster even a lukewarm response like, "We certainly think Vista a superior OS, but after five years in development we would have hoped it had more of an impact on creating a demand for PC upgrades."

We followed up by asking if he preferred Apple's approach to OS development--rolling out an upgrade every 18 months or so--versus Microsoft's multiyear process. Otellini responded that he had heard that Gates said a day earlier that there could be one more monolithic Windows upgrade. "If that's true," Otellini paused before continuing, "I would rather have them move a lot faster and keep up with silicon technology."

On other topics:

Apple: Asked straight up which chip would be in the lightweight laptop Apple is rumored to unveiling next week at Macworld, Otellini said, "I've learned that you don't talk about Apple." Or Vista? we kidded. "Or Vista."

The UMPC: Otellini defended the ultramobile PC, a small form factor PC that has sold in modest amounts. He described the UMPC as "still evolving" and said it's too early to call it a flop. Noting the early days of the cell phone--bulky and expensive devices with limited functionality that are now small, ubiquitous, and powerful--he said, "You would not declare the cell phone a failure in year two."

The medical market: The medical industry "is the least penetrated by IT in the world," which is "why it's so inefficient." He added that that will change when costs reach a "crisis" point.

On Gates stepping aside at Microsoft: "I envy the fact that he doesn't have to do another keynote." He added that Gates "set the standard" for the industry. "Do I miss Bill from a business relationship? Yeah, I've known Bill for years."