Chromebooks, personal computers powered by Google Chrome operating system, have become relatively popular among students in the U.S. because of their low price. At least in theory, such PCs should make a perfect match with inexpensive microprocessors from Advanced Micro Devices. Unfortunately, AMD is not interested in Chromebooks. And there are perfect reasons for that.
“You have to really look at the Chromebook, and what Google’s objective with it is,” said Mark Papermaster, chief technology officer of AMD, reports PCWorld. “For us, it’s just a business decision, when you need our type of CPU and graphics technology that can make a difference.”
AMD’s decision seems to be pragmatic and logical. IDC estimates that only 4.6 million Chromebooks were sold in 2014, compared to 304 million personal computers featuring Apple Mac OS X and Microsoft Windows shipped in 2014. Fighting for Chromebook contracts costs money since AMD needs to help engineers of PC makers to integrate its chips. Moreover, AMD needs to invest in development of drivers and firmware for Google Chrome-based PCs. Meanwhile, revenues and profits on that market are extremely limited.
While average selling prices of AMD’s processors are rather low, the company does not want to sell its accelerated processing units for ultra-low-cost personal computers with minimal margins.
“We play in the whole range of [the] market,” said Mr. Papermaster. “We’ll play in [the low-cost] value. You have to at least get paid for that value when you’re working on graphics. You go below that, and you’re looking at $7 chips.”
By contrast, AMD’s arch-rival Intel offers Celeron chips for Chromebooks. However, the reason why Intel offers such chips is not because it wants to earn additional revenue. The company does not want ARM-based system-on-chips to make it into notebooks, according to Dean McCarron, principal analyst at Mercury Research. Intel wants x86 to be architecture of choice for PCs. AMD, who owns an ARMv8-A license and can develop and sell microprocessors featuring ARM architecture, does not care about prosperity of x86.
“For whatever reason, Chromebooks make a lot of sense for Intel to pursue, but I agree with AMD’s perspective that it doesn’t make financial sense for AMD to chase the segment if they’re not seeing a positive margin,” said the analyst. “Perhaps Intel is using Chromebooks as a bulwark against ARM encroachment into the traditional PC client space, and this motivates them to pursue markets AMD would have little interest in.”
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KitGuru Says: On the one hand, AMD’s pragmatic approach to Chromebooks seems to be completely logical. At times when AMD needs to cut-down its R&D budgets, it should not spend on an operating system that is not important. On the other hand, in the future Google will blend Chrome and Android and this is when both platforms will gain importance for everyone.