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Positive Black Friday Sales Give AMD New Hope

During a conference in Scottsdale, Arizona on Tuesday, AMD Chief Executive Rory Read told investors that the company has seen some positive news stemming from Black Friday deals over the last few days. Currently it's too early to call the 2012 holiday season a big success, but AMD's performance through the Thanksgiving holidays "looked reasonably well".

The news is undoubtedly a glimmer of hope for a company that just announced a restructuring plan that includes a 15-percent reduction of its global workforce in the fourth quarter of 2012. As a result of the restructuring, operational savings – primarily in operating expenses – will be approximately $20 million in the fourth quarter of 2012 and approximately $190 million in 2013.

"Our restructuring efforts are decisive actions that position AMD to compete more effectively and improve our financial results," Read said in October. "Reducing our workforce is a difficult, but necessary, step to take advantage of the eventual market recovery and capitalize on growth opportunities for our products outside of the traditional PC market."

Later in November, AMD reportedly hired on J.P. Morgan Chase & Co., a leading global financial services firm with assets of $2 trillion and operations in more than 60 countries, to explore its options. There was talk of a potential sale, or a liquidation of its portfolio of patents at the very least. But AMD fired back at the rumors, reporting that it's not actively pursuing any kind of sale at this time.

"AMD’s board and management believe that the strategy the company is currently pursuing to drive long-term growth by leveraging AMD’s highly-differentiated technology assets is the right approach to enhance shareholder value," the company said in an official release.

Read said on Tuesday that despite encouraging PC sales over the Thanksgiving weekend, the industry itself is still facing long-term problems as consumers flock to tablets as their primary computing device. Global shipments are expected to decline slightly this year, the first annual drop since 2001, thanks to a struggling economy in the United States and Europe, and slowed economic growth in China.

Because of this, Read said that he does not expect the PC market – which is reportedly around 85-percent of AMD's business – to recover from the slump for several more quarters. What may fuel the eventual recovery is Windows 8 and the various new form factors that try to trump Apple's own iPad.

AMD's sales numbers may have also increased over the Black Friday week due to its involvement with the just-launched Wii U console. The company, which previously provided GPUs for the original Wii and GameCube consoles, currently supplies its DirectX 11-capable Radeon HD GPU for the new Wii U. Nintendo said it has already sold over 400,000 units in North America alone since its debut last week. In contrast, the original Wii saw 600,000 units sold in the first eight days.

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  • amk09
    It will also be providing GPU's for the next generation Xbox and PS4, good news for AMD :)
    Reply
  • If AMD fails, we all loose.
    Reply
  • dark_wizzie
    Consumers flock to tablets... Average consumer doesn't know jackshit anyways.
    Reply
  • anxiousinfusion
    We only have a few more months until the release of AMD's sea islands 8000 series GPUs, no? I hope that adds to their recovery.
    Reply
  • dolamite74
    This is a smart move and lot's of companies do this all the time 8) it's called trimming the fat.
    Reply
  • A Bad Day
    The console business should really help AMD.

    anxiousinfusionWe only have a few more months until the release of AMD's sea islands 8000 series GPUs, no? I hope that adds to their recovery.
    A shame that their CPU department couldn't be as successful as the GPU department.
    Reply
  • jerm1027
    I think AMD should partner with Canonical to provide us with an Ubuntu tablet. I think Unity would be a good interface for touch and netbooks and Canonical already has a developer preview that looks very promising. If AMD could figure out how to get their low-power APU's to run silky smooth with Ubuntu, it could be a strong alternative to the locked down Win8 RT. If they partnered with another hardware vendor (like ASUS) to give us an open tablet like Google did with their Nexus 7, and a distribute as well (like System76), I can guarantee Linux enthusiasts as well as people on a tight budget would flock to an open x86 Ubuntu tablet, myself included.
    Reply
  • erick81
    I did my part from black Friday through cyber Monday I bought a Fx-8350 coupled with a Gigabyte 990Fx mb and two Sapphire Vapor X 7770 gpus.
    Reply
  • internetlad
    erick81I did my part from black Friday through cyber Monday I bought a Fx-8350 coupled with a Gigabyte 990Fx mb and two Sapphire Vapor X 7770 gpus.
    If those two 7770's are for crossfire, then you've got me scratching my head.
    Reply
  • erick81
    internetladIf those two 7770's are for crossfire, then you've got me scratching my head.The machine is going to be a gift for my nieces the 7770's made more sense with what I had planned to get for a Cpu and Mb but the 8350 and 990Fx fell into my lap for a price that I couldn't pass up so for now it'll work out.
    Reply