AMD Will Pass on 'Netbooks' for Now

AMD Chief Marketing Officer Nigel Dessau says AMD will pass on the low-cost notebook or netbook market for now, although Web sites are offering interesting details about a low-cost AMD notebook chip. Dessau is also looking to strengthen AMD's Opteron brand after problems with the quad-core version of the processor.

Advanced Micro Devices is taking a pass on the low-cost notebook market for now, but new marketing chief Nigel Dessau says the chip maker will continue to watch the so-called "netbook" space as it continues to develop.

Dessau, who took over as AMD's senior vice president and chief marketing office in March, said in a telephone interview AMD is interested in how the low-cost notebook market will develop, but has no immediate plans to offer specific processors for these laptops.

"We are not saying it's not an important segment and we're not saying it's not a growing segment," Dessau said. "What we are saying is that we are a smaller company and we have to focus on what we do well at this point. We are watching that segment rather than playing in it, but as it matures we'll see where it goes. At this moment, we are going to focus on what we do best."

While there is debate about whether these low-cost notebooks represent the next stage of mobile computing, companies are starting to put money and new chip and notebook designs into the market to replicate the success Asustek Computer has had with its Eee PC. Intel and Via Technologies, the other two players in the x86 chip market, each have processors for the low-cost notebook market, and PC vendors such as Dell, Hewlett-Packard and Acer have brought or will bring new netbooks into the market.

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AMD, which has placed an emphasis on processors that are low-cost and use less power, would seem to be well positioned to enter this market with an x86 processor. The issue came to the forefront the week of July 14 when new CEO Dirk Meyer hinted that the company might add a chip to its road map later in 2008 that would address these markets.

Some blogs have reported that Meyer was referring to an AMD chip called "Bobcat," which will then compete with the Intel Atom and Via, which recently introduced a new low-power processor called Nano.

AMD's Geode processor, a low-power chip that is appearing in some versions of the One Laptop Per Child XO notebook, is another candidate.

However, Dessau indicated in his interview that AMD was content watching how the market would develop for now. Some analysts also believe AMD will stay out of the market for now as it looks to recover from several financial setbacks and refocus its limited resources on the high-volume server and PC markets.

AMD reported its seventh straight financial loss July 17—Hector Ruiz also announced he would step down from the CEO's post—and Meyer indicated that the company would refocus its energies on its core businesses of graphics and processors, which will take the company deeper into the midmarket and away from the untested netbook space.

This means that AMD will likely focus on its new mobile platform, which launched in June and is designed for more mainstream notebooks for small and midsize businesses as well as consumers, who continue to drive the notebook market. AMD also released a desktop platform earlier in 2008 that it hopes will drive new sales in the enterprise and with midmarket companies.

In the interview, Dessau said AMD is also working on strengthening its Opteron brand after the company failed to deliver the quad-core version of the chip—Barcelona—on time after technical problems with the silicon were discovered. One reason for this problem was that AMD did not get working samples of the chip out to customers on time.

As AMD turns its attention to a new version of Opteron, which is called "Shanghai" and will be built on a new 45-nanometer process that offers a boost in performance, Dessau said the company has learned its lessons. Dessau added that AMD also has to show customers the difference between a processor's performance, such as improvements in clock speed, and what the chip can actually do in terms of handling the specific workloads a business needs.

"We have to separate out the speed of the processor from how it's going to be used by the customer," Dessau said.

While Dessau did not offer specific details, he noted that the company would emphasize Opteron's virtualization capabilities and its traditional strength in the multisocket server space, where technology such as integrated memory has given the chip an edge compared with Intel's processors.

Intel's new microarchitecture, Nehalem, is expected to close that gap by adding an integrated memory controller and other features.

"We need to assure our customers and we need to assure the market that the mistakes of the past will not be repeated and that the latest Opterons are winning benchmarks and solving customer problems," said Dessau. "We need to surprise them when it comes to 45 nanometer and that means making it a little bit better than they think. We need to go from the Barcelona blues to the Shanghai surprise."

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