AMD prays for Black Friday surprise
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| AMD's chips are often found in low-cost PCs, which means executives can't get a true sense of fourth-quarter sales until after Black Friday. Image: AMD |
Based on Intel's dramatic sales warning Wednesday, you might expect rival Advanced Micro Devices to just crawl into a hole and die. If the economic mess is tripping up the most powerful chip company on the planet, how could its underdog challenger stand a chance?
Indeed, investors think that when Intel (INTC) sneezes, AMD (AMD) gets the flu. After Intel predicted fourth quarter sales will come in about $1.5 billion below its previous forecast, AMD shares plunged as much as 9% in midday trading Thursday before a broad market rally sent shares up 5% for the day. Intel shares, by way of comparison, were down only 5% midday and finished up up nearly 7%.
The pessimism about AMD does make some sense. While Intel has more than $12 billion in the bank, 80% share in PC chips, and a recent record of thumping AMD in the marketplace, AMD has been losing money. In a tough environment, you bet on the healthier company.
Or maybe not. Take a closer look at AMD and Intel, and it's not quite that simple.
For starters, there's a good reason why AMD isn't lowering its sales guidance quite yet. Chief Financial Officer Bob Rivet told financial analysts Thursday that rather than echo Intel's warning, he will give an update the week after Thanksgiving.
Why wait? Because of Black Friday, the biggest shopping day of the year. Bargain-hunting consumers are AMD's core audience, while Intel does far better with higher-end consumers and businesses. Holiday buying will surely take a hit this year –Â a survey from Accenture shows that 40% of U.S. consumers plan to spend less this year than last. But if enough coupon clippers show up on Nov. 28 to buy cheap PCs, AMD could get a boost. Veteran chip analyst Nathan Brookwood of Insight 64 said the poor economy might help AMD gain share.
Of course, AMD-powered bargain PCs still won't be the most eye-catching deal at retail. That honor will go to netbooks, a new breed of lightweight mini-laptops that are good for Web surfing and word processing, and that tend to come with Intel's low-cost Atom processor inside. Though we could easily see netbooks selling for less than $199 this holiday season, AMD is hoping that their limitations will tempt buyers to trade up to a fuller-featured PC. (Don't even think about listening to a CD, watching high-def streaming video, or playing anything more exciting than Solitaire on a netbook. They can't handle it.)
Even with the netbook challenge, AMD has reason for hope. Its stock has been doing so poorly –Â it's down more than 90% from its high three years ago — that even mediocre sales performance will seem like a huge victory. After its recent layoffs and a planned spinoff of its manufacturing operations, AMD's balance sheet numbers are friendlier: Executives say that if AMD can manage more than $1.5 billion in sales — 15% less than last year — it can claim a profit.
Believe it or not, AMD might pull this off. Its latest graphics chip is taking share from rival Nvidia (NVDA). Its new server chip, code-named Shanghai, is getting positive reviews. If bargain-hunting PC buyers show up even in modest numbers, AMD has a fighting chance. (To make the best of it, AMD chief marketing officer Nigel Dessau tells me he's actually spending more this year to school U.S. and European retail workers on the benefits of AMD technology.)
This is certainly no time for unbridled optimism, and AMD has proven it can fumble even in good times. But it has an extraordinarily low bar to step over. Intel expects fourth quarter sales to come in about 15 percent below last year, and it's a disaster. If AMD turns in roughly the same performance, it will be cause for celebration.
Oh, I am so rooting for AMD to pull ahead. I think they are pretty intelligent, and it saddens me that they've had it rough recently. My computers have all had AMD processors and they've all been quite satisfactory. Yay!
I first got an AMD processor back in 2003. It was an emachines with an AMD Athlon 1800+ processor, and I've said "so long" to Intel processors since. The only reason I got an Intel processor in my laptop is because the store didn't offer any AMD processors. My current machine has an AMD Phenom (don't remember the rating number), but I am thoroughly pleased with it.
No problem L.D. HP is always having crazy rebates so I don't doubt you paid 700 for it. You are obviously very happy with it and it is a great deal for the price. I think My comments were fueled not by you laptop choice but the authors comment that " (Don’t even think about listening to a CD, watching high-def streaming video, or playing anything more exciting than Solitaire on a netbook. They can’t handle it.)". It definitely makes me think he didn't do enough research into netbooks. From my own experience and hundreds of reviews on amazon it is obvious that this just isn't true. One guy on amazon even posted a video of his netbook running dreamweaver ms-word and playing music all at the same time, then he ran halo! obviously with the settings turned down but wow!
It's been a good discussion so enjoy your laptop as I will enjoy my netbook 
Thanks
Mike
Mike, Well put my friend. I enjoyed this debute with you. I know the prices where they are today for my laptop but I have the invoice which is the only hard proof I have that I paid 700 bucks for my laptop.
And yes I agree you have different audenices for different types of systems.
But thinking in long term this is just like the beta Vs VHS and HD DVD VS Blue Ray. Question remains at the end which one will remain the true winner? No I don't think they'll fully disappear like HD DVD did but who will hold the biggest numbers in terms of market size.
Obviously we both have different views and different opinions which is great. Think of how boring this earth would be with out a good debute every once in a while.
And to conclude my comment I have to respect you and your information as you came fully prepared and you did your research unlike others whom have commented with out knowning what they are talking about.
The hp is nice but without native 1080 p resolution you have to scale blue ray and therefore lose the " stunning HD picture " if you have to hook it to an external monitor to run a blue ray disk at native resolution it kind of defeats the idea of HD portability. And with only 2 hours and 22 minutes of battery life with the standard no extra charge 6 cell battery and screen set to 50% brightness. And weighing 5.84 pounds according to the review.
http://www.notebookreview.com/default.asp?newsID=4486
It really isn't meant for someone who wants to take it somewhere for a day without having to pull out the power brick and recharge it. I think it is fine for a desktop replacement but I think it is aimed at a totally different audience than the netbook, I can literally snag my netbook like a paperback head out the door for at least 6 hours, no hassle. I checked out the hp site and if you add the 15.4" diagonal WSXGA+ High-Definition HP BrightView Infinity Display (1680 x 1050) and the blue ray player and choose the lowest option in everything else, memory 1gb , HD 160 gb, video card ati 3200, wifi- g only, Turion 2gh proc ( required with the screen option ) and no extended service , it comes to 874.99. Don't get me wrong I think this is a great laptop and a deal, but even configured with all middle of the road options puts it over a 1000 on the hp site. Great desktop replacement option in my opinion though.
I think the sony you mentioned at 2.87 lbs. (with standard battery) 10.99"(W) x 0.93"(H) x 7.87"(D)
is more in line with a netbook but at over 2000 dollars it is also selling to a different audience, also the screen isn't 1080p it's 1366 x 768.
So even if you dig around you are still not getting true HD on any cheap portable/lite blue ray laptops, but I think the real problem is you are talking about a different audience. What video/audiofile is going to want to watch hd on a postage stamp sized screen, and by postage stamp I mean any laptop screen smaller than 17 diagonal. Netbooks are cheap practical and functional and most important ultraportable coming in at 2 pounds with 6 hour battery lives.
I think AMD will do well in the segment that your laptop lives in but I don't think it will change anybody's mind about buying a netbook. Different audience with different needs.
I have the HP dv5z Series with the blue ray drive. (Remember I never mention anything about progressive scan screen or resolution but that I did have HD LCD). This notebook was built custom including the highest quality ATI card that I could choose at the time. The weight comes in at 4.99 Lbs (5 lbs if you wish to round it off). And yes it does use an AMD processor. Total price did came a little higher than any netbook $700 including shipping. But I'll tell you this I do not regret it one bit this notebook has not lagged once, has not skipped, studder, pixalate, etc not once. Matter a fact it out performs my desktop pc half the times. I love it. and really for what it is its not to much of a hassel to carry it around. You'll spand a little more but I'll recommand it any day over a netbook.
Might I add sony does have a blue ray that weighs in at 2.5 lbs and its a laptop with the progressive scan but price tag on it is 2700 bucks. I don't think no one will be going to it unless your rich.
Just because a majority of the laptops tends to be around the 7, 8 lbs rang and tend to cost a little higher it does not mean you can't find a cheap blue ray laptop. You just have to dig in a little deeper. There out there just a little harder to find. Hope this helps out.
Could you tell me what make and model laptop you have, If it's cheap lite and has a blue ray drive and a hd screen, I might buy one.
Mike, I respect your comment. And I happen to own a laptop that is AMD and that has blue ray and all its glory and guess what it does not weigh 8.8 lbs.
But I'm not going to waste my time sitting here writing comments to people who are close minded about products and who regardless of facts will still go for new products for what ever the reason.
I've stated what I needed to say put my facts in writing and that is it. I know I'm right I know did my research so why defend my self and waste time repeating?
L.D your outrage about people throwing AMD under the bus sounds a little thin. Do some homework about feather light blue ray laptops with hd capable screens, The cheapest one on newegg is $1499 and guess what, it weighs 8.8 pounds!! http://www.newegg.com/Product/Product.aspx?Item=N82E16834117831
Try checking dell or hp, same story there. Just try configuring a lightweight HD ( 1920 x 1080 p ) blue ray laptop, good luck.
My comment was that netbooks are good for a lot more than this article makes them out to be, just go to newegg and read the hundreds of reviews to see what people are using them for, Video watching, work and world of warcraft.
Netbooks are the number 1 selling laptop segment and customer satisfaction is very high.
PS. Expensive graphics cards are a luxury item and people aren't going to be buying a lot of those this season either, read a paper.
I can see closed minded people have joined the chat wanting to throw AMD under the bus. Thats ok to each his own opinion. But let it be known that while AMD processors are not *yet* competitive to Intels offers that doesn't mean they have bad quality video cards. Just the oppsite folks. Ever since coming out with the ATI HD 4000 series graphics card they have not only made a very stable and true performing graphics card but they have gained and continue to gain market shares from Nvidia. The reason the company(AMD) was able to narrow its losses in the books was because of the strong profits coming in from the purchase of these graphic cards. They are thus far very competitive with higher end models beating the competition against nvidia. All laptop offerings are very comptitive while I heard nvidia had recalls on several laptop chips. I'd recommand you bring some credible facts to the table instead of spreading these fake rumors around. If you want to debate and prove a company to be better off than the other at least be fair and give the other company a fighting chance with some honest facts.
My reason for bringing this was was to say that first laptops are not 8 LBs. You can get one that has blue ray that is lite and small. You can even call HP, Dell, Etc…. And request them to make it to your needs. The cost will probably be about 100 to 200 dollars more but it'll be well worth it when you hear that quality sound with that stunning HD picture.
Netbooks can't stream high-def? Wow,the author of this article is clueless, I've streamed 8GB h264 rips on my netbook.
'm getting an ASUS Netbook from Santa.
These are much more powerful than people think. You can Play WoW and many other games on these. They are also wireless and run almost all day on a charge. I have an 8gig external flash drive and a WD120gig USB external drive to use with it. You can buy a cheap external DVD drive if you really need it but who does? People, do your research before you start running your mouths.
I am still unclear why five weeks sales of finished goods (PCs from BF to EOY) will impact AMD's current qtr financials. The general TPT of the mfg of a PC to on-shelf is likely eight to 13 weeks. Typically, for a DT PC, the motherboard if mfg in at an ODM in TW with a chipset, then built into a generic 'box' (with or without CPU), and then shipped via boat to various markets. The time it takes to reach the US is likely several weeks (up to six / eight)from TW, and at that point, if it's not a completed product, it might go to Mexico for final configuration (online sales). If it's a finished good for a retailer, it still needs to go to a warehouse, and distributed by truck. Given the TPT time from CPU/chipset sale from a si vendor to a finish consumable PC product, all AMD's (and Intel's for that matter) silicon has already been shipped. GAAP revenue recognition for AMD (and Intel) is when the product is received by the ODM / OEM (not when finished PC goods are sold out). For NB systems, it's likley completed overseas, but still sent via ship (air freight is too expensive).
AMD has the worst Board of Directors in any companies history. The comapny has been running on the edge of profitability since 1995. If AMD wants to survive it needs to do only two things. Make the fastest processors and make a profit from them.
AMD's big market were the gamers from 2003-2007. Since they incorporated ATI into their own lineup they have stalled on chip development and just beautfied their current set of chips. This allowed Intel to come back into the scene in 2006 and steamroll them in the gaming scene. It really didn't take much. Just a smaller more efficient chip paired with a reliable chipset.
The ATI branch of AMD hasn't produced stunning results that can significantly outperform Nvidia. Their only choice is to make something cheap that can play true HD media that AMD can incorporate into notebooks, while they come up with options that are cheaper than nvidia and can compete in the gaming world. Once AMD gets around this economic rough patch they can poise themselves to catch up to Intel.
Netbooks are a bad example to use an an economic indicator. They are already dead on arrival just like Blu-Ray. Many PDAs can do the same tasks without the same bulk, plus cheapo notebooks can outperform them and will most likely be the choice of cash strapped corporations. Which gets us back to the point; can AMD incorporate their chips into PDA's, notebooks and retail desktops?
The clear answer is no. Over the last 8 years AMD hasn't been able to make a strong footprint in Dell, HP or IBM machines. This can be attributed to non-compete contracts Intel made with their partners locking AMD out of the retail scene.
AMD never made it's money off corporate deskptop machines. They made their money from gamers and servers. If AMD wants to stay in the race they need to compete with intel by advertising they are more cost friendly, more efficient, and just as stable as Intel.
One problem; the BLACK FRIDAY DEAL$ SUCK, BIGTIME! The so-called $300 laptops are now $400+ so it's netbooks or $400 laptops (twice the price).
And, at those price ranges one could go intel just as eaily as amd. The overall economy is not doing well.. and I'd be surprised if there are more than 100 people lined up (and one store) at 4-5 am anywhere in the country… with how good the deals are this time around.
It's time to protest black friday by not shopping on this day.. the same way $5 gas brought down destruction of demand. 8 years of bush's broad concern of big business deserves a consumer strike against retailers & black friday is THE day of the year to do it!
All I gotta say is Jim Cramer likes AMD and recommends their stock. That's saying something right now.
I disagree, unless you are running a laptop with a screen with NATIVE HD resolution ( which also equates to a mutch more expensive laptop especially if you also have a internal blue ray player) you are already screwing any quality you gained from watching direct from blue ray and killing battery life. I play movies compressed in divx format on a netbook and they look great. It is easy to take on trips, weighs nothing and almost gets lost in a carry on. I can load a couple movies and I don't have to lug a 8 pound monster machine with a 17 inch screen onto a plane. my kids love sitting in bed watching movies and using the wireless internet as well. All for $350.. DEAL !! buy 3 for the family for less than the price of a laptop with a blue ray player and a luggable 17 inch HD native screen. We love ours.
Netbooks to my opinion are not going to fly. Yes You can rip movies using certain software out there but it will NEVER be the same as it is watching it stright from a Blue Ray DVD(Talking in terms of quality here folks). Movies on a USB stick not a good idea in my opinion transfer rate I think is to slow, ripping it to the HD again your dealing with quality issues. Plus can the video card on the netbooks even decode Blue Ray movies? Because Watching just regular dvd's isn't worth it any longer. I rather just purchase a Decent AMD laptop with Blue ray player and have some fun. But hey thats just me and my opinion and to each his or her own.
dang … even if NETBOOKS don't have optical drive who said you can't listen to music … how about USB? duhhh … who said you can only write music or video on CD/DVD … dang prices of USBs are dropping maddddd!!!
But I'm still a fan of AMD … they got a chance to hit Intel bigtime (which they almost did) but came out flat!
Actually, you all seem to be forgetting about ATI. This time last year, AMD was hip deep in ATI charges — the 15% sales decline (threat) is dwarfed by what was last year's reality. AMD *will* show a profit, provided they keep the crap (all the way) off the balance sheet. (Akin to stopping the pointing of the gun at one's own foot.)
I know I'm one of the ones saving up and planning for Black Friday. I haven't purchased much in the last 3 months, but I plan to unleash on BF.
Who on earth carries arround cd's or dvd's anymore?? anybody living in 2008 with a netbook is going to rip movies to any number of formats and have all their music in a digital format anyway( even my 9 year old daughter!! ) and yes netbooks are perfect for playing movies and music. And my wife and kids love them. And I doubt anyone is goint to blow more than 500 bucks on anything on black friday, particularly a notebook. Most people are just worried about paying their over inflated morgage.
"tech school 101", I guess somebody needs to take their own advice. Good insight from the author. The reason they call it Black Friday is because this when most retailers expect to be back in the black and possibly in the green as far as revenue goes. The period between Black Friday & Xmas is supposedly the largest consumer spending period of the year. Black Friday will give us a very good idea of what consumers are looking to spend for the 4th quarter. Many are saving up for Black Friday, hence the low October numbers. I myself included. =)
Seems to me the same ol' thing – A lot of IF's, MAYBE's, HOPE's, etc. I can't see how AMD can claim a profit if it sells 15% less than it did last year. Of course, spinning off the biggest money sink (manufacturing) to somebody else may also enter into the equation. Looks like the press has fallen for the AMD hype once again. One failure after the next, but hey, there's always the next hyped up disappointment.
Dumb supposition, waiting to see how sales are going to go on a single day two weeks from today, ir order to determine if you need to warn or not?
Not how the cip industry works, chief. Any chips used in Black Friday machines have long been shipped, and the way CPU backlog works, these companies know WELL in advance how theri following 2 months of sales are going to be..and thus the Intel warning.
AMD is just doing it's normal tap dance, and apparently you bit the bait.
From Jon Fortt: You need to think harder about what you just said here. Black Friday is the biggest shopping day of the year, and sales patterns that day (and the days after) could give a lot of insight into overall holiday quarter demand. It's not just about the number of chips AMD moves on Black Friday — it's also about how quickly retailers need to restock, and what that does to overall electronics industry confidence.
great article, right on the money. AMD might come strong after the recession wary audience probably decides it's time for some money-saving in tech dept. Along with soon-to-be-release Shanghai CPUs for consumer market, they might do very good in several months or years even.
very good article
I think AMD will come out in the end, since the quads came out, not including intels HT versions. I think they have been nearly the same on performance, and as a gamer who builds his own and friends PCs it generally comes down to prefrence, either pay a lot more for the Intel which has slightly more power, or pay less for AMD which has insanly high BUS.
Excellent article summing up AMD's current situation. Nice job, Jon. AMD is struggling but their performance in the last six months has been excellent. They've gained a lot of market share from NVIDIA and the new Shanghai chips leave Intel in the dust when it comes to performance per watt and other metrics.
What has this author been smoking? Of course you can listen to a CD on a netbook. For goodness sakes, these compouters incorporate single core chips running at 1.4 to 1.6 GHZ, the standard just a few years ago. Granted, you won't want to run Crysis, Photoshop or Autocad pon one of these, but you can certainly watch a DVD, listen to a musci CD or your mp3's. These are simply not the craptastic buy that the chip makers (and, evidently, uninformed technology reporters) want you to think they are. Probably 80 to 90 per of non-gaming consumers really don't need much more. And as for your correspondent, send him (or her) back to tech school 101.
From Jon Fortt: Netbooks don't even have optical drives, so no, you can't listen to CDs or watch DVDs.
i think amd deservce better market share but i think its intel better marketing and corporate contracts that have strengthened there lead; but by the way right now i m using laptop with AMD Turion 64×2 and i m happy with it