Dell Staying With Intel's Chips

[raildogg]

Dell Staying With Intel's Chips

By TSC Staff
2/23/2005 3:44 PM EST

Updated from 12:25 p.m. EST



It's over before it began, apparently.

Dell (DELL:Nasdaq - news - research) CEO Kevin Rollins said the company is no longer considering using microprocessors from Advanced Micro Devices (AMD:NYSE - news - research).

Rollins spoke Wednesday at the Goldman Sachs Technology Symposium in Phoenix. He said Intel's (INTC:Nasdaq - news - research) apparent recovery from technology and execution missteps in 2004 has given Dell, the world's largest computer manufacturer, increased confidence in Intel, its sole supplier of microprocessors.

"Whenever one of our partners slips on economics or slips in terms of technology, that causes us great concern," Rollins said. "For a while, Intel, admittedly, slipped technologically and AMD had made a step forward."

Rollins, said, though, that Intel, the world's largest chipmaker, appears to be fully back on track.

"Intel acknowledged the challenges, got their engineers fired up, and have been steadily improving their technological roadmap vis-a-vis AMD. That's now starting to put customers more at ease that they don't need to make a shift."

The possibility that AMD would crack Intel's monopoly at Dell had reached a fervor toward the end of 2004, helping AMD's stock price more than double in the year's final three months to end the year at $22.02.

Since then, Intel has accelerated its product roadmaps and posted fourth-quarter financial results that were much better than expected. From the year's start, AMD shares are down 25%, and Intel shares are flat.

Rollins' statement comes a week before Intel holds its semiannual Intel Developers Forum, an event that always produces a slew of press releases and product updates.

On Wednesday, AMD shares fell 3.3% to $16.44. Intel shares dropped 2.1% to $23.26.

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Well those that hated Dell will hate it even more now

 

[MrChad]

Not too surprising. I don't think AMD has the resources to meet Dell's demand for processors anyway.

 

[halfadder]

No complaints from me. I prefer the A64 over the P4... but once Dell starts using the Pentium-M in their desktops we'll see some very small, quiet, cool, and fast machines!

 

[Kibbo]

Originally posted by: MrChad
Not too surprising. I don't think AMD has the resources to meet Dell's demand for processors anyway.

If offered a contract, they would find them.

 

[0roo0roo]

i guess dude i'm never buying a dell

 

[Lonyo]

It makes sense. Especially with the new Xeons, which look to be quite a bit better than the old ones.
Remember Dell isn't a home PC company, it supplies all kinds of systems, and AMD dominance in desktops doesn't mean much in the grand scheme of things, if Intel have good mobile and server products.
Obviously the benefits of staying with Intel outweight the opportunities from moving to AMD.

 

[Hottie]

I bet you toward the end of the year Dell will have a press release talk about testing AMD chip again, just to make sure Intel to give time the best possible deal for 2006.

Next...

 

[DerKaiser]

Not too surprising. There was probably a chance that they would offer them in servers, but AMD just doesn't have the Fab space to meet Dell's demand.

 

[MisterChief]

Dell sucks anyways. Not my problem.

 

[Insomniak]

Guys, this has nothing to do with Fab space. As mentioned, if AMD were offered a contract, they'd FIND a way to meet the demand.

This has to do with the fact that people are stupid and buy Intel because that's what's on TV. I work at OfficeMax and I have people turn down Athlon 64 machines in favor of Celerons all the time, just because it says Intel on it.

This is all about making the sale - Dell would sell you a socket 478 turd if Turd was the most well known processor manufacturer. It's called business.

 

[batmanuel]

I'll bet it was the annoucement of the nVidia/Intel deal and the nForce 5 chipset that tipped the scale back over to the Intel camp. If it hadn't happened, I'm willing to bet Dell would have been seriously looking hard at putting A64s+nForce 4 SLI mobos into their XPS systems, just to keep their XPS series from getting bitchified in the benches by Alienware and Falcon Northwest's SLI offerings.

Even with their limited production capabilities, Dell could have at least worked a few high end A64 chips into the low volume/high margin XPS line and not had to worry as much about availablility than if they introduced the chips into their mainstream PCs If they were looking at the possibility of being left behind on the cutting edge of performance gaming systems, I bet they would have bitten the bullet.

 

[leedog2007]

Dell is a mainstream company and AMD is close to a niche manufacturer (even with better chips), and i seriously doubt they have the capacity to match Intel's price point.

 

[imported_obsidian]

It's their loss. AMD has been killing intel for a while with its opterons. Oh well, I'm sure those itanium sales make up for the loss.

 

[thegimp03]

Sounds like Intel gave Dell an offer they couldn't refuse....

 

[sandorski]

who'dathunkit?

Begin
If Time >= "6months" then
Post("Dell considering AMD!")
Post(NewsArticle.Dell.AMD)
Time:= 6months +1
Post("Dell sticks with Intel")
End
End

 

[Pariah]

Originally posted by: obsidian
It's their loss. AMD has been killing intel for a while with its opterons. Oh well, I'm sure those itanium sales make up for the loss.

Yup, Dell is really hurting because of not using AMD. Sales appear to be suffering severely as well:

Record Revenue, Shipments, Operating Income and Cash Flow Highlight Dell's Fiscal Fourth Quarter

 

[ribbon13]

No shit... don't forget that dells offerings make damn fine SQL servers.

Most serious AMDers build it themselves anyway.

 

[Wingznut]

Originally posted by: Insomniak
Guys, this has nothing to do with Fab space. As mentioned, if AMD were offered a contract, they'd FIND a way to meet the demand.

Umm... Where do you suppose they'd all of a sudden "FIND" this capacity?

 

[dev0lution]

Any resellers having problems getting Intel product? Hrmm....it's all becoming clear now.

 

[diabloII]

i guess the majority of people who buy from dell are ones that have no knowledge of computer and as far as I know, only intel has commercials and are more well known (to the average joe who knows nothing about computers) than an AMD

 

[christoph83]

Originally posted by: Wingznut

Originally posted by: Insomniak
Guys, this has nothing to do with Fab space. As mentioned, if AMD were offered a contract, they'd FIND a way to meet the demand.

Umm... Where do you suppose they'd all of a sudden "FIND" this capacity?

I was going to say the same thing.

 

[VirtualLarry]

Originally posted by: Insomniak
This is all about making the sale - Dell would sell you a socket 478 turd if Turd was the most well known processor manufacturer. It's called business.

That's a strange way to spell "Celeron", isn't it?

 

[ribbon13]

If they got a contract, first thing they would try to do likely is to push cheap budget systems with thier excessive stock of socket As. That would give them enough time to make a stock of A64s for whatever Vendor.

 

[ribbon13]

Originally posted by: VirtualLarry

Originally posted by: Insomniak
This is all about making the sale - Dell would sell you a socket 478 turd if Turd was the most well known processor manufacturer. It's called business.

That's a strange way to spell "Celeron", isn't it?

That actually made me laugh. Thats rare. :beer:

 

[Wingznut]

Originally posted by: ribbon13
If they got a contract, first thing they would try to do likely is to push cheap budget systems with thier excessive stock of socket As. That would give them enough time to make a stock of A64s for whatever Vendor.

So, you think Dell would hand them a contract, change their entire marketing and business strategy, all so that they could sell budget systems consisting of excessive stock? And then hopefully someday AMD could free up enough capacity.

And you think this plan would help Dell make more money???