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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.
AMD Making Push Into Commercial PC Market
AMD is taking steps to build a commercial PC chip business starting with the first chips in the Pro A-Series family—the five-core (two CPU cores and three graphic cores) A6 Pro 7050B, and the A8 7150B and A10 7305B, both of which hold 10 cores (four CPU and six GPU). The APUs all come with high-end integrated Radeon R4 or R6 graphics capabilities, offer greater performance than AMD’s consumer chips and include a range of manageability and security features that are important to businesses, Kapoor said.
In addition, the Pro A-Series chips offer businesses the investment protection they need, with a 24-month lifecycle and 18-month image stability, support for AMD’s Eyefinity technology—which enables systems to connect to up to four displays—and Heterogeneous System Architecture (HSA), which enables the CPU and GPU to share memory and data and leads to increased efficiency.
AMD officials also are dedicating more sales resources to the commercial client effort as the company looks to court top OEMs. In the past, AMD took a relatively passive approach with the system makers, essentially selling the chips to vendors like Hewlett-Packard and Lenovo and leaving it to them to decide what PCs to put them into, Kapoor said. The result at times would be AMD processors being put into lower-end systems.
With more dedicated sales resources and APUs with more enterprise-level features, AMD is now working with the OEMs to get its chips into business-class systems, he said. The chip maker has had some success: HP features four EliteBook commercial notebooks that are powered by AMD’s A6 or A10 processors. Lenovo also offers AMD-powered PCs—including the ThinkPad X410e thin-and-light system and the E545 business notebook (with an A10 chip). The chip maker also is courting Dell, Kapoor said.
“We want AMD Pro to stand out in those top-of-the-line systems,” he said.
In a market dominated by Intel, finding room in commercial PCs isn’t easy, according to Kapoor. But the expectation is that enough business customers will want what the Pro A-Series chips offer—from the high-end integrated graphics (which is important, given the increasing graphical nature of commercial workloads) to the lower prices—that OEMs will bring out new AMD-based PCs to meet the demand.
And getting those system makers on board will be a key challenge, according to Bob O’Donnell, chief analyst for market research firm TECHnalysis Research.
“What’s most important, at the end of the day, is getting HP, Lenovo and Dell—who really count—to get on board,” O’Donnell told eWEEK.
However, AMD’s focus on business PCs makes sense, given the resurgence in the segment, he said, noting that he expects demand for commercial systems to remain high for several years.
“Their timing is very good because we are seeing a commercial refresh,” O’Donnell said. “It will have some legs because there are a lot of very old commercial PCs out there. It’s a good time to get into the commercial market.”
There are challenges, not the least of which is convincing the world’s top three system vendors to increase their use of AMD chips—or in Dell’s case, to use any of them. However, a viable alternative to Intel chips would be attractive to OEMs and end users alike, he said.
“It’s always good to have competition in terms of both pricing and negotiations,” O’Donnell said. “Those are all good things.”