AMD: The Prognosis . . .

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The AM2 numbers are in, and, as expected, they are little better than the 939 numbers.

When Conroe shows up, the other shoe will drop, and if these numbers are the real deal, the campers will become unhappy.

Doesn’t look good on the mobile side, either. Intel was in pretty good shape already, and Merom will only make it better.

Not even the server side looks all that promising, once you realize what’s going on. Yes, Dell will be selling AMD-based servers, but only for four-way or more servers or more.
In the great scheme of things, this is not a disaster or even disaster-in-the-making for Intel. The total number of servers sold is only about 5% of the total number of desktops sold, and the vast majority of that 5% are one and two-way systems.

If we’re looking at the four-way or better market, we’re looking at around 2% of the total CPU market.

I think the way you need to read the Dell action is “Intel will get back into the ballgame for most servers soon with Woodcrest, but won’t at the higher end any time soon due to AMD’s better interconnects.”

Dell or nor Dell, that assessment is hardly good news for Intel, since those server chips are a lot more profitable, but the walls of Jericho aren’t coming down. Woodcrest ought to stifle AMD from grabbing big additional chunks of the overall server market (though I think AMD is there to stay in that market).

Outside of that one little server niche, the prognosis doesn’t look sunny. The only silver lining behind the clouds is that Intel may continue to get bad press if they’re not able to meet demand on these new-generation processors while having a toughening time firesaling the old stuff. Come to think of it, that’s not entirely good news for AMD and its pricing, either.

Stopping Big Mo

On the enthusiast side, it seems pretty clear what’s going to happen. Intel will zoom up to grab the majority of sales (provided there’s something to buy and/or price-gouging doesn’t begin), though it won’t be a tidal wave.

It’s not so clear what’s going to happen in the overall market. Right now, the general media is on the “bash the big guy and cheerlead for the darling underdog with momentum” bandwagon. Not that Intel didn’t deserve bashing, or AMD hasn’t had some real momentum, but a lot of the media has been giving AMD a free ride and listening to Ruiz and Company like rats listening to the Pied Piper.

So much of AMD’s battle plan has been based on generating the perception of momentum and getting the media to buy it, which is why Intel is so hellbent to stop it, no matter what damage it might do to the bottom line for a while. If one had to predict sales the next few quarters, one would have to say that Intel will first stunt AMD’s marketshare growth with the stuff on sale, then roll back at least some (not all, probably not even most) of AMD’s gains with continuing sales and the new stuff. (Server sales may increase for a while yet.)

That leaves AMD in a Catch-22. If they ignore what Intel does, they’ll lose marketshare, and certainly any marketshare momentum. If they cut prices, their financial results will drop, which will kill their financial momentum (and likely, their stock price).

What happens to the Big Mo story when the Mo stops? Can the Pied Piper keep up the spell long enough for the new stuff to arrive, or will the ratsturn on him?

There’s one problem with a bandwagon. It’s wonderful when all is going good, and even when things stop going so good, people still hang on for a while, but at some point, everyone gets off, usually at the same time.

For practical purposes, AMD is going to have to try to keep the perception of momentum going with smoke and mirrors for close to a year without people asking too loudly or frequently, “The Empire is striking back. Where’s your new stuff, Skywalker?”

Ed


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