12 thoughts on “AMD gives us a Tech reality check”

  1. Om,
    Thanks for the reality check. There are economic headwinds ahead, which, while not originating in the tech industry this time (unlike the 2001 bust), will still have an impact on the industry. It is great to see you on top of this.


  2. The AMD story has more to do with its competitive position with Intel than on overall indicator of the economy. AMD is still digesting the acquisition of the ATI graphics and chipset businesses and the synergies AMD was looking for have yet to develop.

    Q1 and Q2 are historically slow quarters in the PC business. There had been some hope that Vista would spur some fresh demand, but that does not seem to have happened. AMD also hitched up with Dell just as Dell was hitting the rocks.

  3. Good to keep an eye on this stuff. I would point out one company doesn’t make a trend. I’d watch the obvious companies, YHOO, MSFT, AAPL, GOOG, HP and see what they make of 2007. I recall a few quarters ago YHOO blamed their faltering numbers on a slowdown that never materialized – turned out they had their own problems.

  4. Maybe the pace of device introduction, or possibly the smash-you-in-the-face saturation of every industry nook and cranny, is hurting demand. Why buy today, when tomorrow is smaller, faster and better? I wonder if we will ever hit a point of “immediate obsolescence”, where just by releasing a product it has already become antique, and the real winners will be the perpetual betas that never commit to saying they’re “done” with innovation. Will there ever be a time when the Holy Device stops changing (hardware-wise) and when it will be all software that provides functionality differentiation? Software which updates wirelessly/automatically/anywhere-ly. I’m tired of waiting for my magic wand.

  5. The question has to be can this news be used as a proxy for Vista’s impact or lack thereof?

    Of even worse, what if pre-installed Vista is stalling the market? A market that really does want it or the headaches involved in removing it, just yet.

  6. AMD’s competitive position with intel has suffered with
    1) The increasing popularity of notebooks vis a vis desktops. AMD has great desktop chips but not so great notebook product line.
    2) Intel becoming competitive in servers with good perf per watt …

    If Intel gives a similiar warning Id be scared, Otherwise its like Yahoo warnings which are due to Google and not a sign of the market

  7. Kevin,

    You might be right, but it is good to watch the commentary from other chip companies this earnings season because that is going to give a good picture of how the market is going to shake out.

    The most important one will be Texas Instruments, which is a proxy on Nokia and basically if things are bad there – and I suspect they are – TI will say so. Big day will be April 23rd, when TI reports.

  8. Charlie,

    You have a good point – Vista was supposed to be warm front that didn’t really show up. I am sure we will see that in the coming days when Microsoft announces its earnings.

  9. Om –

    Interesting thoughts. About the marketing, my experience has been that when there’s a downturn in the market, there’s an increase in spending on targeted and effective marketing. If companies like AMD want to reach tech influencers, they’ll be more likely to spend their marketing dollars on sites like yours and less likely to buy advertising in the broader traditional media.

    Traditional media advertising will be hurt more than anyone.

  10. Om,

    I agree, we’ll see what Intel has to say and what the market research numbers show in a couple of weeks.

    The most important thing AMD can do is get the Barcelona quad-core server processor shipped to improve server margins and shift all its products to 65nm to reduce costs.

    Intel is also getting hurt by lower ASPs, but unit numbers for Intel look healthier. Expect these two arch rivals to be trading punches for some time to come. Both companies have excellent products, and competive roadmaps. This is going to be a slugfest like an Ali-Frazier fight.

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