Funny thing about technology journalism. No one talks about a topic and it's not in the public domain. You then do a story and suddenly you’re inundated with new information. That happened over the weekend, during our server move (yes, we know, KitGuru works overtime, Saturdays, Sundays and during the World Cup too – just to find the world’s freshest scoops for our readers). So what has KitGuru heard now?
We're hearing about a strong movement within Sony toward AMD. That's it in a nutshell.
Our recent analysis of the 500% increase in AMD’s share price was prompted by the fact that many top financial houses still have the brand set to ‘buy’ because they expect it to outperform the market. Why is that strange? Well, to KitGuru, having AMD on ‘buy' while the stock price increased over the past 18 months is fine, but carrying on upwards is an unusual state of affairs.
Imagine the opening day in a Formula 1 season and Red Bull wins by 30 seconds. How many experts would bet that, 6 races later, the gap would increase to 3 minutes? Unlikely. Why? Because that's not the way competition works.
Brokers live and die by being able to predict future markets. Standard and Poor's (S&P) tracks trillions of dollars in market value. Looking at one of its charts over the past 5 years, you can see that there's no easy way to predict a upwards movement of 500%. It just can't be done. So why the constant, positive movement for AMD's share price?
In a new market (think 1982), almost anyone could enter the market and create something new that would turn the world on its head. Roll the clock forward 17 years and we are dealing with a much more mature market. People who need computers, already have computers. The market for graphic cards has been falling steadily and there’s no reason to suspect that it will shoot back up (at least not for the traditional, discrete, graphic card).
Could it be console business? Unlikely. Around 40 million Xbox 360s have been sold since launch, whereas the system market is more than 300 million in a single year. So that's unlikely to be a major influence. Something else is pushing AMD's stock price. That something can only really be sales (or confirmation that future orders will be placed).
KitGuru has now heard from multiple sources that a significant deal has been done between Sony and AMD.
Let's stress that it's unlikely to be all of Sony's SKUs, but it could be a sizeable number.
In KitGuru’s previous article, we focused on how 3rd party producers (so called White Box producers) like Clevo were adding more and more AMD products to their roadmaps. Now it seems that AMD’s sales force, led by John Byrne, is gaining much more traction with the major brands.
For systems, Sony ranks between 4th and 10th in most markets. While not number one, it is still a very significant customer to begin converting to AMD ahead of Fusion. From the official Sony site, it seems that almost all of its traditional products were Intel based.
In terms of brand awareness and value, Sony is one of the only companies that can stand toe-to-to with Apple. Just as Apple gave us the iPod, Sony gave us the Walkman. Apple gives us the iPad and Sony gave us the Playstation.
AMD's simplified new strategy for end users looks to divide the world intelligently into 3 groups. The minority who create content, the bigger group that shares content and the majority that just uses. AMD Vision branding targets these 3 groups. While us geeks buy on detailed specs and benchmarks, the majority uses completely different metrics.
For consumers, Sony is a lifestyle choice brand. It's a mass market choice. That makes it a natural target for AMD Fusion.
A new deal with Sony will, of course, give AMD sales as well as a little extra market share. Most of all, if AMD doesn't drop the ball, then this deal will help generate credibility and presence within a serious lifestyle brand in the run up to the launch of Fusion.
KitGuru says: To see if the movement we’re seeing toward AMD is real, KitGuru will be speaking exclusively with one of the world’s largest research companies. Who knows, maybe we’re not reading the signs correctly.
Have a view? Discuss it in the KitGuru forums over here.