AMD: ''No Doubt, We Lost Market Share in Q2''
If there is anything that AMD cannot afford these days, it is making avoidable errors that affect its product shipment and sales.
In a time when its mighty rival Intel appears to be navigating the storms of a macroeconomic financial challenge in Europe and China with solid execution and adjustment of its business, AMD seems to be tripping over its decisions and shooting itself in the foot. Fortunately, it appears that the company got away with only a black eye in Q2.
The company reported revenue of $1.41 billion for the second quarter, down 10 percent year over year, and down 11 percent sequentially. Net profit came in at a razor thin $37 million. The recently appointed CEO Rory Read had to, for the first time as the man in charge, calm analysts and investors about a rather sobering Q2 result that stands in stark contrast to the result announced by Intel earlier this week. Read chose to be straightforward with analysts and mentioned several times how "disappointed" he was with AMD's performance, highlighting that AMD could have done better.
The overall explanation for the reduced revenue were lower CPU shipments and slightly lower average selling prices, caused by a pronounced softness in the desktop consumer market late in Q2, AMD said. AMD was hit with, as Read called it, a "pause" in the adoption of its Bulldozer Opteron processors and the supply of Llano processors into the channel. The bright spots included Brazos 2.0, which is targeting the $500 and below notebook segment, as well as the GPU business, which contributed nearly half of the operating profit in the quarter and was in line with a seasonal decline of the business
Read wasn't exactly clear what happened and danced around the events, but noted that the supply constraints of Llano late last year caused the company to prefer OEM shipments over channel shipments. Once the chip became available, he noted that they had been sitting with OEMs for awhile, impacting uptake. AMD poured Llano processors into the channel, but misaligned the availability of boards with processors, which caused a substantial oversupply. Read described this as a problem of "linearity" and as a "supply mismatch", which is in AMD's control to fix. He said that the company has taken steps to accelerate channel sell-through and hinted that this problem was avoidable.
The executive also referred briefly to a price erosion in the client PC processor market and said that AMD chose "not to chase" lower price points. As a result, he told analysts that he had "no doubt" that AMD has lost market share in Q2.
It was unclear if that has happened in the server segment as well, but the description of "pause" was rather dramatic. While Read said that the adoption of Bulldozer especially in the HPC market was great, the current situation is less encouraging and it appears that Intel's Sandy Bridge Xeons may have hit AMD unexpectedly hard.
Like Intel, AMD also believes that the market will remain soft in Q3. Read said that, for the first time since the dramatic downturn of 2001, the PC industry faced a PC client shipment decline over three consecutive quarters, which could create a problem for AMD if this trend holds up. While AMD has a strong balance sheet today, it will have to cover debt obligations later this year, which CFO Thomas Seifert noted that he feels comfortable to cover from the cash reserves, which currently stand at $1.58 billion, up from $1.54 billion in Q1, but down from $1.77 billion in Q2 2011. Seifert noted that AMD will have to balance debt and investments payments as well as maintain cash reserves in a weakening economy.
So, is the new AMD becoming the old AMD again, at least from a financial perspective? It is too early to tell, but it is clear that Read has to put out fires rather sooner than later.
but you are still a very important competitor to intel to push technology further more.
but you are still a very important competitor to intel to push technology further more.
They should focus on ultimate value and price cut as much as possible. They need to get their products moving and fast. I don't see how anyone considers AMD "value" when a 4100 costs $140 and is absolutely outclassed by a $120 i3.
They keep pushing the old Llano and bulldozer parts into the retail space where almost nobody wants them. Release Trinity and Piledriver, already! Market share is not going to be gained, otherwise.
because amds new value cpus are apus, and beat out intel at the same value...
considering that all cpu tasks have been fast enough sense the eairly dual core chips, much less the current quad with threads we see, i say does it matter if amd is slower?
all the tasks that intel beats amd where you would see a performance difference great enough to warrant an intel over amd, are going to the gpu, and the gpu, even a bad one, out preforms the cpu by so much that you would never want o use it for said tasks again.
if anything, intel is in trouble. as they cant pull together a decent gpu after YEARS of trying, and now that we are moving to gpu co processors, intel has that much more ground to cover.
with that said, if amd came out with a chip 4 times better than the current top end intel, do you really think that they would gain market share? intel would eat the few billions in fines to try and stomp out amd till they get a processor on par.
Another note, AMD was actually in the running to be with Apple, and allegedly the big people from AMD were on a flight to Apple ready to sign paperwork and Intel swooped down and took it away. Don’t know how true that is, but it’s just where Intel is trying to be a monopoly is all I’m trying to get at.
Your ignorant, the only way ANY of the Ivy Bridges has a chance to beat a APU of any kind is to have a dedicated video card. Hell A6's will put up 30fps on just about any video game, but a i7 by itself cant even put up 15 on super low settings...
There GPUs are pretty competitive, even more so now that they cut prices on some to make room for the GHZ editions.
over $100 of difference when you're talking about a few $100 is hardly what i call selling close to an i7 Price,
Octacores sell for roughly $200, i7's sell for over $300
Dooms day say'ers focus on the wrong aspect of large companies trying to battle to the death =P
That way Intel has no real reason to speed things up, in the CPU market.