We Were So Successful, We Failed . . .

Hector had a bad day yesterday. He was so convincing yesterday that two security firms downgraded their estimates of AMD stock after the meeting.

The AMD spin was “We were so successful with the OEMs that we just forgot about everyone else, and mysteriously, that caused the revenue failure.”

In other words, we failed because we were so successful.

What appears to have really happened is that AMD chucked/had to chuck their production at the big OEMs, pretty much stiffing the smaller fry, and when sales from the biggies were less than expected, they then went back to the people they had just stiffed.

Not surprisingly, the little folks were less than loving about this, and payback came in the form of lowered prices. I mean, really, if demand were really so great and exceeding supply, why does AMD keep having to lower their prices?

But that isn’t the really significant event. What is significant is what you see in the news accounts and the analyst comments is a growing public skepticism about anything and everything being said by AMD. It’s not bandwagon anymore; the attitude is now “Show me,” and when AMD refuses to answer, that’s now being pointed out.

That is very bad news for a company that expects fairly fawning media coverage to fuel momentum. For quite some time to come, any media kudos are going to have to be earned.

The media bias hasn’t turned decidedly negative yet, though. There is still general consensus that AMD will be able to at least get back into the ballgame with the K8L/K10/Barcelona series.

And that’s AMD’s real problem.

Take a look at this Anandtech article. This tells you everything about the Barcelona chip, in mind-numbing detail, except the one thing everyone wants to know: how well it does against the Intel competition, current or future. No doubt that’s the one thing AMD didn’t provide

I’ve said it many times before and I’ll say it again: AMD is not the least bit shy about sharing good news when they have it. When they won’t tell you what you would naturally want to know, and instead give you funny words which imply but don’t quite say what you would naturally want to know, that means they don’t have any good news.

For those who knee-jerk “Well, Intel hasn’t released Penryn numbers, so AMD doesn’t have to, either,” well, Intel isn’t the company in trouble at the moment.

Furthermore, when Intel was in (rather less) trouble about a year ago, and needed to prove something, that’s just what they did. They released C2D numbers, and I defy anyone to tell me that doing so hurt Intel.

So if we’re playing tit-for-tat, if Intel releases numbers early for a hot product when it was in some trouble, why can’t AMD do the same when it’s in a lot of trouble.

AMD needs money. Keeping a hot product secret when it’s trying to get more, either through another loan or by issuing more shares, would be insane (and far more importantly in the case of the latter, would likely result in a shareholder lawsuit). The financial advantages from doing that would far, far outweigh any dubious hypothetical advantage Intel might gain as a result (and BTW, if AMD were legitimately so concerned about keeping secrets away from Intel for competition reasons, wouldn’t the Anandtech article mentioned above spill the beans, too?)

No, if we don’t see real benchmarks real soon, the real reason for that is that the current numbers don’t meet the hype.

And if that remains the case next August-September, if you think AMD’s getting bad reviews now from the stock market and analysts, just you wait.


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