At the end of 2010, the mood at AMD was pretty positive. After languishing around the $4 Billion turnover mark for ages, the company finally delivered a quantum jump to a bigger revenue position. However, 2011 proved to be a much more difficult environment. KitGuru pulls out the trusty abacus, puts its sense of humour to one side and begins counting beans.
Against a backdrop of global economic crisis over the past 4 years, any increase in revenues should be met with good cheer. You would think. Not in Sunnyvale or Wall Street however.
While AMD does have a channel presence, there’s no doubt that it has been doing much better with the Multi-National Corporations (MNCs) like Dell, Acer, HP etc. Indeed, El Presidente, Rory Read was keen to say “AMD shipped more than 30 million APU’s in 2011, resulting in record annual notebook revenue”.
So that’s a plus for the Fusion product and the MNC team, powered by sales athletes like John Byrne – no surprises there.
Against that, sales of GPUs into notebooks dropped by around 10%, showing a movement in the market as a whole, toward single chip solutions where possible. Taiwanese manufacturers chasing production savings? Shocker.
Also, internally, AMD had hoped for a lot more from its Bulldozer development teams – especially with Intel on the verge of kick-starting its Ivy Bridge business around CeBIT in March. This time last year, Intel was in the throws of the Cougar Point recall for Sandybridge.
To help counter the onslaught of Intel and the all-conquering approach of the Cuppertino crew, AMD has brought in former Apple/Cisco top tech Mark Papermaster. Given that he’s been a familiar site around 6th Street in Austin since his college days, he should find it easy to integrate and get to grips with AMD’s processor teams. The question is, “Can he do anything useful to help AMD prepare for Haswell in 2013 – or is it already too late?”
So far, AMD’s focus has been on adding more and more cores to each chip – but each core hasn’t managed to deliver enough work per cycle to effectively challenge the Core 2 processors. AMD will be hoping that the recruitment of former Intel engineer Rajan Naik as its new Head of Strategy will help.
Losing 24 cents per share is relatively small compared to some of AMD’s past financials, but the real problem is that they have announced their new figures around the same time as Apple. Each Apple share has just attracted a dividend of around $8.50 – in a world that’s claiming financial distress, this seems unreal.
Commenting on a year that’s seen income increase from $6.49 to $6.57 billion, while delivering a loss of $177 million, Read said “We begin 2012 clear on our priorities and opportunities. We are building an AMD that consistently delivers on its commitments”. When you consider the kind of opposition he’s up against, that’s superhero talk. Wall Street must be crossing its fingers for a resurgence.
KitGuru says: Anyone who thinks competition is a good thing, needs to hope Read is right. Roll the clock back around 10 years and AMD was all about performance per watt. Unfortunately, at the same time, it got sucked into a GHz war with Intel, that rapidly changed to a core war. Just as AMD rolled out more cores, Intel moved focus back to power and size. At the same time as these 2 giants were bashing away at each other, Arm comes along with a production partner like Samsung and starts producing millions and millions of chips for Apple devices that ‘just work’ and cost a fortune. Nothing that’s come along, over the past decade, has been out of AMD’s reach (in terms of technology), the company has just not been standing in the right place. It’s hard to blame anyone but Ruiz and Mayer. In a subtle twist of irony, Read has everything he needs to ‘win’, in terms of technology, all he needs now is Vision. We wish him luck.
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