AMD Taking Cautious Approach to Tablet Market

While announcing third-quarter earnings, CEO Dirk Meyer said AMD will innovate for tablets when the market matures.

Intel may be moving aggressively into the tablet PC market, but rival Advanced Micro Devices will take a slower approach, according to its CEO.

However, when AMD does make its move within the next few years, it will come with processors packing high performance, low power consumption, and great graphics and video capabilities, CEO Dirk Meyer said Oct. 14, while talking with analysts and journalists about the company's third-quarter financial numbers.

Meyer said he expects that as the tablet market evolves, OEMs will be taking low-power components found in netbooks and putting them into tablets. That will dovetail with the direction AMD is taking its client chip platforms.

"I think you'll see AMD solutions in tablets in the next couple of years for that reason," Meyer said.

Apple's iPad has kicked off a resurgence in the tablet space, fueling a host of other vendors, including Dell, Hewlett-Packard and Research In Motion, to develop their own tablet PCs. Analysts believe that the promise of upcoming tablets are a reason that consumers are holding off on buying PCs.

Officials with both AMD and Intel said they said they saw weaker-than-demand in the consumer PC market, though it was somewhat offset by increased corporate spending and demand in emerging markets.

In the third quarter, AMD numbers were further hampered by the stake it has in Globalfoundries, which was created last year when the chip maker spun off its manufacturing business.

AMD lost $118 million-compared with the $128 million it lost during the same period last year-on $1.62 billion in revenues, a 16 percent increase over the third quarter in 2009.

Meyer said he expects sales to be flat in the fourth quarter.

AMD's results came two days after Intel announced record results, hitting more than $11 billion in revenues. During the conference call, Intel CEO Paul Otellini said his company will become a major player in the tablet market, driven by Intel's Atom platform. The first of the Atom-based tablets, the WeTab from German-based company Neofonie, is due out later this year, while more tablets running on the processor will start appearing next year, Otellini said.

While praising the Apple iPad for reinvigorating the tablet space, he said Intel's intent is to dominant the market.

"We will use all of the assets at our disposal to win this segment," Otellini said. "We fully expect to participate fully and broadly in this market."

Meyer said tablets are still in their early stages, and he expects multiple form factors to come out over the next few years. AMD this year will begin to ship its "Ontario" processor aimed at low-power notebooks, netbooks and tablets, but Meyer said the company will not put a lot of effort behind tablet-specific technologies any time soon.

"We're still so small in the notebook market that given all of the opportunities in front of us it doesn't make sense for us to start turning R&D dollar spending toward the tablet market yet," he said.