Didn't take long....

[SexyK]

More bad news for AMD

Based on an analysis of Intel's first-quarter results, the company controlled 80.2 percent of global microprocessor revenue during the period, up 4.5 percentage points from 75.7 percent in the fourth quarter of 2006. Meanwhile, Intel's chief rival, Advanced Micro Devices Inc., lost a corresponding amount of share of share, with its portion of microprocessor revenue falling to 11.1 percent in the first quarter, down 4.6 percentage points from 15.7 percent in the fourth quarter.

It seems that in one quarter Intel was able to reclaim most of the marketshare that AMD was slowly whittling away over the last year or two. It's really pretty unbelieveable that Intel pulled of such an incredible turnaround considering that pathetic state of their product lineup just a year ago.

Barcelona is looking more and more like a do-or-die for AMD at this point, how much more can they bleed off? Going from a net profit of $184M last year at this time to a $611M net loss last quarter due to lower prices AND lower shipments is troubling, not to mention the fact that they are now coming out and saying publicly that a leveraged takeover by private-equity firms may be in their future. (link)

 

[Phynaz]

Actually AMD was knocked back to 2003.

Think about the accomplishment Intel pulled off...Reduce your competitors market share by ~30% in a single quarter, while reducing their margins by another 25%.

That's pretty much perfect execution.

 

[SexyK]

More troubling news:

AMD within two quarters of running out of cash.

Anothing interesting tidbit from that article that I hadn't heard previously is that AMD will begin outsourcing production in order to save cash on capital expenditures - doesn't bode well for a move to in-house product of graphics products.

 

[Phynaz]

Wow, get this line:

"We believe AMD will not have a product that can match Intel's 45-nm parts for at least 12 months, and even then we expect it will take AMD considerable time to regain lost market share"

That hurts...A lot.

 

[the Chase]

Wow- with Intel's continued price cuts and new CPU's coming this is looking ugly. It will be interesting if Intel backs off of the pricing pressure to increase their margins or goes for the "knock-out punch" with lower prices through this and next year. I would be dumping AMD stock like a mad dog right now after a lackluster conference call and this newest info.

 

[fivetiger]

So, what were the factors that allowed things to get THAT bad??

 

[harpoon84]

Originally posted by: fivetiger
So, what were the factors that allowed things to get THAT bad??

Basically, people stopped buying AMD, even at reduced prices. I'm rather startled that in ONE quarter AMD can wipe out 3 years of good work. Pretty sad, really.

We need a strong AMD to give Intel competition, but it looks like they've awoken a sleeping giant keen on regaining pride after 3 years of humiliation by the little guy.

 

[zephyrprime]

I'm really surprised that things moved this fast as well. Consumers were so slow to move to AMD even though the Intel offering at the time was sucktacular but consumers are now super fast in moving to C2D for some reason.

 

[Cooler]

The new "hip" core2duo commercials may be the reason. Intel seems to be taking a page from apple and appealing the ~20-30 year olds who are the ones that may buy a computer every two years. I cant remeber the last time I saw an AMD commercial even in the netburst era.

 

[SexyK]

Originally posted by: zephyrprime
I'm really surprised that things moved this fast as well. Consumers were so slow to move to AMD even though the Intel offering at the time was sucktacular but consumers are now super fast in moving to C2D for some reason.

IMO consumers are much more likely to move back to something they know (Intel) than to move away from that known to an "unknown" (AMD). I think that explains why Intel was able to get back the share fast despite the fact that it took AMD a long time to make those gains. I'm not surprised that once Intel had technology leadership back the marketshare came fast, although I am somewhat surprised at how ridiculously fast it came.

 

[nyker96]

actually I think AMD's heavy 1st Quater loss in profit+margin+market share has been 2+ years in the making. They basically stopped updating their core for 2 years while Intel has been trying to catch up. Last year 4/2006 or so I remember AMD said they believed A64/X2 is such technological marvels that they think both cores can hold on against any Intel assault without update until 6/2007 or so. They has also abandoned their grass root supporter like us in the retail channel last Xmas by shunting CPUs into huge OEMers like Dell and Lenovo leaving retail market dry. Now retailers are giving them a hard time coming back in because most has established new supply channels with Intel now and considering what AMD done Dec, 2006 they are wary to get reconnected with them again.

Personally I can't say I feel sorry for them. Not updating tech. for years, abandoning their original enthusiasts supporters that made them who they are. THey have to understand the support they get from buyers are contingent on quality of product and satisfaction of customer, you let both go, they can't expect people to support them any longer.

 

[myocardia]

Originally posted by: nyker96
actually I think AMD's heavy 1st Quater loss in profit+margin+market share has been 2+ years in the making. They basically stopped updating their core for 2 years while Intel has been trying to catch up. Last year 4/2006 or so I remember AMD said they believed A64/X2 is such technological marvels that they think both cores can hold on against any Intel assault without update until 6/2007 or so. They has also abandoned their grass root supporter like us in the retail channel last Xmas by shunting CPUs into huge OEMers like Dell and Lenovo leaving retail market dry. Now retailers are giving them a hard time coming back in because most has established new supply channels with Intel now and considering what AMD done Dec, 2006 they are wary to get reconnected with them again.

Personally I can't say I feel sorry for them. Not updating tech. for years, abandoning their original enthusiasts supporters that made them who they are. THey have to understand the support they get from buyers are contingent on quality of product and satisfaction of customer, you let both go, they can't expect people to support them any longer.

I couldn't agree with you more if you had written both of those paragraphs in blood. AMD's blood, of course.

And to those of you who still think clockspeed is all that matters, I'll let you keep using your 3.6-3.8 Ghz P4's. I'd much rather have a 2.0 Ghz octo-core that can do 25,000 IPC's per core.

 

[fivetiger]

IMO consumers are much more likely to move back to something they know (Intel) than to move away from that known to an "unknown" (AMD). I think that explains why Intel was able to get back the share fast despite the fact that it took AMD a long time to make those gains.

The upside of this for AMD is that if they can get back on their feet, consumers won't be so slow to move to their products this time around.

 

[Linux23]

This suck. I don't want to see AMD pull out of the market. We'll be back to $1000 CPU's again.

 

[SexyK]

Intel has always had the same pricing structure, even when AMD was a non-factor in the market, so I'm not so much worried about prices as I am slowing down innovation. What's the point in quickly developing new tech if there's not a constant threat of being passed by? Prices would be fine but innovation would probably slow down.

 

[LordGestle]

Originally posted by: Linux23
This suck. I don't want to see AMD pull out of the market. We'll be back to $1000 CPU's again.

Agreed. A price difference of 200$ for 33MHZ differences would not be a good thing.

 

[TecHNooB]

It seems like April 22nd will decide AMD's fate... for the consumers anyway. AMD already knows where it's headed.

 

[golem]

Originally posted by: LordGestle

Originally posted by: Linux23
This suck. I don't want to see AMD pull out of the market. We'll be back to $1000 CPU's again.

Agreed. A price difference of 200$ for 33MHZ differences would not be a good thing.

Depends. If 33MHZ represents a 33% increase in speed, that's better than a 200MHZ increase if that only represents a 5% bump.

 

[Jeff7181]

Originally posted by: Cooler
The new "hip" core2duo commercials may be the reason. Intel seems to be taking a page from apple and appealing the ~20-30 year olds who are the ones that may buy a computer every two years. I cant remeber the last time I saw an AMD commercial even in the netburst era.

Exactly. It's marketing. People used to say Intel's marketing budget is larger than AMD's gross profits. I'm not sure how true it is... but it's not hard to believe.

 

[Accord99]

Originally posted by: Jeff7181
Exactly. It's marketing. People used to say Intel's marketing budget is larger than AMD's gross profits. I'm not sure how true it is... but it's not hard to believe.

That's not really hard to do, given the huge disparity in size of the two companies and AMD's lack of profits over the years.

 

[gorobei]

myocardia is right, you're dead on with your summation.

their biggest problem was CEO ruiz. the previous CEO was the one that had the vision and business sense. He was in charge when AMD combined the k6 and DEC architectures to make the K7 athlons(their first real performance and profit success.)

everything fell apart when ruiz took over. they cut R&D spending, and sat back counting the profits for 2005-6(their only year where they actually made any profit. AMD's been operating at a loss for almost 7 years now.) they even sold off part of their profitable flash mem division.

The only upside is that the ATI acquisition means they might come out with some proprietary new technology. If they dont run out of money first.


PS: I actually own AMD and INTC stock, so I'm not a hater or fanboy. I just like the fact that AMD has historically made the better product at a lower price. Too bad ruiz screwed up what should have be a slow, steady rise to a larger market share.

 

[SexyK]

Originally posted by: gorobei
myocardia is right, you're dead on with your summation.

their biggest problem was CEO ruiz. the previous CEO was the one that had the vision and business sense. He was in charge when AMD combined the k6 and DEC architectures to make the K7 athlons(their first real performance and profit success.)

everything fell apart when ruiz took over. they cut R&D spending, and sat back counting the profits for 2005-6(their only year where they actually made any profit. AMD's been operating at a loss for almost 7 years now.) they even sold off part of their profitable flash mem division.

The only upside is that the ATI acquisition means they might come out with some proprietary new technology. If they dont run out of money first.


PS: I actually own AMD and INTC stock, so I'm not a hater or fanboy. I just like the fact that AMD has historically made the better product at a lower price. Too bad ruiz screwed up what should have be a slow, steady rise to a larger market share.

I wouldn't exactly say AMD has historically made the better product at a lower price.... if you look at the Jerry Sanders/Andy Grove years, Grove pretty much bashed Sanders' skull into the wall at every opportunity. Sanders was only able to make headway once Grove retired and Intel entered a transitional phase. Now the Sanders is gone, you're right, there doesn't seem to be much passion in the AMD camp whereas Intel's new leadership has reenergized the company.

 

[ironk]

I think a lot of socket 939 people got pissed off at AMD...and its showing. AMD just ditched 939 all of a sudden and went to AM2. Most of us expected them to support the platform much longer. They should have gone straight from 754 to AM2...

Also, i don't know why they bought ATi with their crappy linux support. Why not just concentrate on what you're good at: Making CPU's. This is going to be a tough year for them, if not awful.

 

[defiantsf]

Originally posted by: SexyK

Originally posted by: gorobei
myocardia is right, you're dead on with your summation.

their biggest problem was CEO ruiz. the previous CEO was the one that had the vision and business sense. He was in charge when AMD combined the k6 and DEC architectures to make the K7 athlons(their first real performance and profit success.)

everything fell apart when ruiz took over. they cut R&D spending, and sat back counting the profits for 2005-6(their only year where they actually made any profit. AMD's been operating at a loss for almost 7 years now.) they even sold off part of their profitable flash mem division.

The only upside is that the ATI acquisition means they might come out with some proprietary new technology. If they dont run out of money first.


PS: I actually own AMD and INTC stock, so I'm not a hater or fanboy. I just like the fact that AMD has historically made the better product at a lower price. Too bad ruiz screwed up what should have be a slow, steady rise to a larger market share.

I wouldn't exactly say AMD has historically made the better product at a lower price.... if you look at the Jerry Sanders/Andy Grove years, Grove pretty much bashed Sanders' skull into the wall at every opportunity. Sanders was only able to make headway once Grove retired and Intel entered a transitional phase. Now the Sanders is gone, you're right, there doesn't seem to be much passion in the AMD camp whereas Intel's new leadership has reenergized the company.

So true! AMD was mostly one LARGE step behind Intel historically, except for the new design that came from and out of the Nexgen acquisition (i.e. K6, Athlon and Athlon X2). Sander is far from the visionary. AMD and Intel were both founded by people formerly from Fairchild Semiconductor. The common saying in the Valley was the engineers went to Intel and salespeople went to AMD.

 

[Jeff7181]

Originally posted by: ironk
I think a lot of socket 939 people got pissed off at AMD...and its showing. AMD just ditched 939 all of a sudden and went to AM2. Most of us expected them to support the platform much longer. They should have gone straight from 754 to AM2...

Also, i don't know why they bought ATi with their crappy linux support. Why not just concentrate on what you're good at: Making CPU's. This is going to be a tough year for them, if not awful.

I partially agree. I'm disappointed at the lack of choices for my 939 setup when I decided to go dual core. I'm happy with my overclocked 3800+ but I see no reason why the top of the line can't still be socket 939. DDR2 isn't THAT beneficial, especially not at 533 or 667 MHz. At 800 or 1000 things probably start to turn in favor of DDR2, but who has 1000 MHz DDR2 memory right now?

The real kicker is that they're going to want you to buy a NEW platform designed around a new socket if you want the best performance from your quad core processor, similar to the 754/939 decision people had to make.

In my opinion, they've "pulled an Intel." Switching sockets/chipsets with no apparent benefits.