How many distributors a manufacturer needs for a product is a very personal thing. It’s a decision that will be based on a number of factors – including price range, volume and the speed at which new lines are introduced. KitGuru considers AMD’s new move to focus CPU and APU sales for the region.
Manufacturers make products which are shipped to distributors who then sell them to resellers (stores – both online and retail), who then sell the product to us – the end user/consumer. That’s distribution 101 over for today – thanks for listening.
Until now, AMD has used the same kind of distribution method for both its graphics and processor businesses, but – going forward – things will change. Several distribution partners, who are doing very good volume on Radeon graphics cards, will become ‘graphics only’ distributors.
At the same time, the giant Avnet, Ingram, VIP and Microtronica companies will receive increased focus from AMD for mainstream, multi-core CPUs and APU products with integrated Radeon graphics.
This will be seen by many as a ‘collapsing of the supply chain’ and the most logical way for any company to move forward in the 21st century.
We’re likely to see the biggest differences around each product launch. So, for example, when the updated AMD Trinity platform products begin to ship in the 4th quarter, AMD can focus its efforts (and marketing dollars) where they will do the most good.
It’s a bold strategy, but one that AMD needs to consider if it wants to create any ‘force’ in the market at all. We’ve pondered this over tea and biscuits with the conclusion that trickling 10 litres of water out of a large shower head can never compete with the same amount of water being blasted through a Karcher jet wash.
So, to summarise, it looks like half a dozen existing sub-distis will become ‘graphics only’, while Avnet, VIP, Ingram and Microtronica become the sole suppliers for CPU and APU. Resellers and stores across the country will need to make sure they are ordering the right parts from the right place, but the impact on consumers should be minimal.
KitGuru says: If its Intel that you’re fighting, then you’re going to need all the force you can get. Will the change work? Too soon to know, but it has to be worth a go – just to mix things up a little ahead of AMD’s Trinity launch and the arrival of Intel’s Haswell at the start of Q2 2013.
UPDATE: We’ve been contacted by a source close to AMD to say that Ingram and VIP will still be allowed to sell processors, but there was no comment on the ending of the existing sub-distribution agreements – so that change still looks to be on