AMD Making Push Into Commercial PC Market

Leveraging the company's Pro A-Series chips, AMD officials continue their efforts to gain traction in a part of the PC space that is growing.

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Advanced Micro Devices executives during the Computex show in June simultaneously launched the Pro A-Series brand and new "Kaveri"-based chips for notebooks aimed at consumers as well as businesses.

Combined, the announcements highlighted an aggressive push into the commercial PC chip space by AMD, a company that traditionally has had a significantly larger presence in the consumer chip market. AMD executives view the commercial PC space as one of the growth markets the company is targeting for its multi-year turnaround strategy, and creating a brand around accelerated processing units (APUs) aimed at the commercial segment is a step in gaining traction in the segment.

Over the past several months, AMD executives have talked up the chip maker's efforts in the business space, touting the capabilities of their processors and predicting that the industry will see the number of AMD-based commercial offerings on the shelves double by the end of the year.

"Even in the PC space, look at the work that we're doing to move into commercial," CEO Rory Read said during the Deutsche Bank Technology Conference Sept. 9, according to a transcript on Seeking Alpha. "That's really good work. And into the workstation pace and Pro Graphics, win with the winners, HP, Dell, Lenovo. Make sure that we are getting architecturally relevant with them and … have a diverse portfolio. You don't want to have a business where it's centered all over entry-level consumer notebook, that's not the right space. We're diversifying into commercial and look at the progress we've made."

Earlier this month, in a conference room at a San Francisco hotel about a five-minute walk from the Moscone Conference Center, where Intel was holding its Intel Developer Forum Conference (IDF), AMD officials spoke more about their commercial PC strategy, noting that while the overall global PC market may continue to struggle, the business segment is poised to remain strong.

Every year, more than 300 million PCs are shipped, according to Aditya Kapoor, senior director of AMD's Commercial Computing Business Unit. Of those, well more than a third are commercial systems.

"People say that PCs are dying, but absolutely not in commercial," Kapoor told eWEEK.

That's what AMD is betting on. Like other tech vendors—such as rival Intel and OEMs Hewlett-Packard and Dell—AMD traditionally has relied heavily on revenues from PC sales. When PC shipments worldwide began to decline several years ago due to competition from such new computing devices as tablets, AMD took a financial hit. And now, like those other vendors, AMD is looking to expand and diversify its business, targeting such areas as low-power, dense servers, the embedded space, ultra-portable systems and semi-custom chips for systems like game consoles.

Commercial PCs also have become a target. While sales of consumer systems continue to lag, there has been a notable uptick in shipments of business PCs, due to such factors as Microsoft's decision to drop support of Windows XP in April, new PC form factors coming onto the market, saturation in the tablet space and the enterprise refresh of aged PC fleets. IDC analysts in June said PC shipments in the second quarter declined only 1.7 percent, buoyed in part by businesses replacing their older systems.

Those are encouraging numbers to AMD, according to Kapoor, who said they are expecting shipments in the commercial space to at least stay flat over the next several years. For a company that has relatively small market share, compared with larger rival Intel, there is a lot of room to grow, he said.

AMD isn't the only tech giant to make this shift toward commercial PCs. Toshiba, known for such consumer brands as Protégé and Satellite, announced this week it will restructure its PC business to focus more on commercial systems, which officials said offer more consistent profits.