AMD tries to boost weak laptop offerings

IDG News Service - Advanced Micro Devices is trying to build momentum for its laptop chips in an attempt to improve its weak market position and gain ground on rival Intel, analysts said on Friday.

During Thursday's call to discuss the most recent quarter's results, AMD's CEO, Dirk Meyer, said he saw "the notebook market as a big opportunity ... because we are relatively under-represented there." Meyer said the company was doing well in the desktop chip space, with a market share in the "high 20s," but that AMD's share in the laptop arena is much lower than that, and efforts were under way to boost those offerings.

AMD is making its processors more power-efficient to improve laptop battery life, Meyer said, and it has also improved graphics capabilities.

He said the company was also tweaking its low-power Bobcat chip microarchitecture for thin laptops to fit into new markets like "pads,"or tablet computers. Bobcat products will show up next year, Meyer said.

The portable PC market is a high-volume segment that presents AMD with an opportunity to ship more chips and be more competitive with Intel, analysts said.

AMD gained on Intel in the microprocessor market during the fourth quarter of 2009, iSuppli said in a study released late last month. AMD accounted for 12.1 percent of global microprocessor shipments, gaining 1.6 percent compared to the same quarter a year ago, and 0.28 percent sequentially. However, Intel held a substantial lead, with 80.6 percent of the global microprocessor market.

AMD will not shake the status quo, and Intel will continue to capture mind share of laptop buyers, analysts said. However, some pricing and demand trends in laptop chips worked in AMD's favor.

Intel's chips offer better performance, but AMD holds a price advantage, said Nathan Brookwood, principal analyst at Insight 64. AMD has always offered discounts as an incentive for customers to buy its chips, he said.

AMD has also increased chip shipments by snagging more PC makers as partners, Brookwood said. Lenovo signed up as an AMD partner late last year, and AMD-based ThinkPad laptops are now being pushed to small and medium-sized businesses as a cheaper alternative to Intel-based laptops. AMD processors also go into PCs from Hewlett-Packard, Acer, Dell and Toshiba.

There is also a gradual shift in the consumer space from netbooks to mainstream laptops that is benefitting AMD, said Avi Cohen, managing partner of financial firm Avian Securities, in a research note issued on Friday.

Intel CEO Paul Otellini on Tuesday acknowledged that demand for netbooks had levelled off at about 20 percent of all consumer laptop purchases.

Most of the netbooks today ship with Intel processors, and AMD will likely continue to benefit from the return to mainstream laptops, Cohen said.