AMD begins waving the white flag to Intel

AMD fans, you are soon to be made redundant in opinion wars against those who run Intel chips. AMD’s CEO, Rory Read has just recently announced what we’ve all been thinking since the release of Bulldozer – the company is withdrawing from the stiff competition in the market it’s facing from Intel, choosing rather to concentrate on other sectors it can have a stronghold on.

“That era is done,” said CEO Read in an interview with Bloomberg. “There’s enough processing power on every laptop on the planet today.”

“I think we come in and steal the bacon around the whole thin-and-light movement and capture a significant portion of the opportunity there,” he added.

So things aren’t evolving the way we would want on the desktop segment. Laptops are supposedly moving to the thin-and-light design, DVD drives are becoming a dead-end in the 1st world countries with world-class internet and we’re going to see a drop in AMD’s efforts in competing with Intel in the high-end market space.

I’m not going to lie, I wrote a 600-word witty rant earlier about how this was a move only a clever person using dumb logic could make. I could have made some awesome arguments about stuff and fired both you and me up, dear reader. I could have made people stand up and be angry, boycott the company and choose WinTel for the rest of their life because I don’t like this direction one bit.

But that’s not fair on you. Its counter-intuitive to the aim I had when starting my columns on this site in college.

Inasmuch as I like the sound of my own voice and reading what I’ve written on a site that has the logo of my favourite magazine for the past ten years, I’ll admit that sometimes I’m a bit selfish when it comes to opining what’s good or better about a certain product or company’s moves for the average Joe reading this. I know less about running a multi-national company successfully than I do about drifting a car. I’m no more clever than the man running it up now and I don’t have the kind of experience and education he has. I’m an idiot for thinking so. That doesn’t automatically invalidate my opinions, however, but I don’t think  know more than he does.

So in between going for a hot shower and pressing that delete button, I had a change of heart. Not competing so blindly with Intel may be their only way of surviving, but this doesn’t mean I’ve changed and suddenly like Bulldozer. There’s still a spot in my second imaginary heart labeled “Fanboi” that has a place reserved for AMD again, but they’ve got their work cut out to get back there again. Things need to change drastically. So lets look at the bigger picture here.

AMD hasn’t turned a profit for five out of the ten years that its been trying to replicate the success of the original FX series. It bought out ATi in 2006 in a bid to get something resembling a complete platform together in order to compete effectively against Intel’s Core 2 Duo lineup. Changing the naming to have both AMD processors and AMD graphics cards has helped somewhat, but they’re still in a decline, a hole they can’t easily climb out of. They’ve sold off their in-house fabrication to clear up funds and focus on designing and improving their products. They’ve made mistakes, held no-one but the CEO responsible for them and have blamed no-one else but Intel. While Read doesn’t state this in the interview, the company needs to have a mindset change to survive.

They need to be more in-your-face, but subtly.

To change that, Read said he’s implementing a greater use of statistics and measurements in AMD operations and demanding employees take personal responsibility for mistakes. It might work and may help keep people on their toes within the company. For one, their marketing department has not done its job in keeping the brand in the public eye. In addition, their dev teams need to do more work with game and app development studios, using their products and know-how to help improve performance on their products. I’ve only seen in-game branding in DiRT so far, and this needs to change. Read’s strategy of differentiating AMD’s products from those made by Intel, which has had more than 80 percent of the market for PC processors for almost a year, will fully manifest in 2015. That’s a long way away and in those three years certain things have to be kept going to keep the company’s products relevant.

The most important thing for AMD now is improvements to Trinity and Bulldozer’s desktop successor, Piledriver and the mindshare and exposure they have in the public eye. There’s a lack of options in the notebook segment and in the desktop especially if you’re a gamer because there’s less customers asking for their products. With a lack of IPC muscle, a shared cache and shared floating point units, there’s little reason to choose the quad-core FX-8120 over the dual-core FX-4100 where games are concerned, let alone a Core i3-2120. Using OpenCL to their advantage, the dev teams at AMD could turn things around. In addition, those 15% performance improvements between family revisions need to keep coming and they need to actually perform better than that self-imposed 15% margin. I think its reasonable, given the improvements we’ve seen in Trinity, that 20% would be a better margin, don’t you think? There’s already an improvement in their financial situation, so Read’s strategy must be working.

Will all this shuffling around help, what with the loss of about eight or so key people in the last six months? I hope so. For the sake of their fans and the consumer, its important that AMD doesn’t give up the game and doesn’t lose sight of who they’re serving – the consumer who can’t afford or doesn’t want an Intel chip.

Source: Bloomberg

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