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Vendors under pressure to drop AMD notebook plans

Or are they?
Wed Mar 31 2004, 08:36
A STORY ON Digitimes today suggests that large Taiwanese vendors Acer, Asustek and Benq are resisting pressure by Intel to stop them making notebooks using AMD chips.

The article doesn't say what kind of pressure Intel is putting on the Asian giants, but one thing is for sure, AMD has an Achilles' Heel in its underfunded notebook division.

At the introduction of the Athlon 64 at the Computex show in Taiwan last September, AMD was unable to show anything other than token notebook machines. It's currently putting its limited marketing funds into selling desktop and server chips, and faces big hurdles in making a breakthrough on the notebook front.

That's not because there's anything wrong with its notebook chips. A number of factors affect its ability to compete successfully in this sector.

One important difference is that Intel helps notebook manufacturers with the basic infrastructure and R&D to make a successful design. AMD doesn't have the engineers or resources to spare that Intel has.

And then there's marketing, and how. Intel spent an estimated $300 million last year promoting its Centrino brand, which is essentially a clever marketing campaign bundling microprocessor, chipset and wireless technology together. As well as spending gazillions on advertising the well known "kite mark", Intel also has an associated set of co-marketing initiatives specifically for manufacturers. If they make a machine and it's branded with the Centrino kite, they get discounts which help their bottom line.

AMD simply cannot afford to help bolster notebook manufacturers' bottom line in this way.

The only real pressure Intel can place on notebook manufacturers is on these marketing initiatives, and on the price of components.

Look, for example, at this Computex story, where Intel plunged tens of thousands of dollars into ensuring that its Intel girls were on practically every motherboard maker stand.

As far as the Taiwanese manufacturers are concerned, Intel's money talks louder than AMD's because there's much more of it. It's a business decision, not a declaration of allegiance. µ



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