First of all, this move by Dell is not really a reflection of the state of AMD, rather a reflection of the state of Dell. Dell is lagging HP, closing calling centers and laying off people. This is just a move to cut cost, anyone with a little knowledge of operations knows it cost money to keep different types of inventory, develop different type of platform and sell more configurations. Second of all, this is not as bad as many thinks for AMD. AMD was doing well before Dell jumped on their bandwagon. After Dell started buying from AMD, there were many smaller customers complained that they couldn't get the supply or attention from AMD. Plus even tho Dell buys in large quantity, they are tough on price negotiations, and selling to Dell actually reduced AMD margin, just look at AMD financial after late 2006.
If AMD can go back to their old route, taking care of smaller system integrator while maintaining good relationship with OEM that were historically friendly with AMD, they can actually get more profit out of the stuff they are selling.