No one cares about Dell and AMD

THE LOCH Ness Monster. Jack the Ripper. Atlantis. Britney's breasts. The great mysteries of our time surely now need to squeeze up on the bench and make room for one of the IT industry's longest running mystery/rumours: Dell/AMD.

As "will they/won't they" scenarios go, it's a saga long in the making and now that Apple and Intel have popped under the bedcovers for a frolic, there seems little reason for this pair not to get it on too. For a number of years now, the rumour mill surrounding these two swings into action on a regular basis. When I say two, I mean one. You see, the ball is in Dell's court and Michael Dell has yet to lob it back over the net. He might be monogamous but he does like teasing us hacks and the industry at large. He recently told the press that the chip deal with Intel was not exclusive but denied having anything AMD-related to announce. That simple statement landed like a mini-nuke and threw all of the old rumours into the spotlight again.

Towards the end of last year it was reported that Dell had told its Taiwanese manufacturers to start getting their stuff ready for AMD engines but officially the company claimed the reports were rumours. As if Dell would confirm it anyway. A few weeks ago, just after Mickey dangled the carrot, analyst Les Santiago, with PiperJaffray, said in a research note:

"We strongly believe that Dell will start AMD-based system shipments as early as the second half of 2006. We further note that Michael Dell's recent comments noting the 'distinct possibility' of shipping AMD-based systems. Our conversations with sources further indicate that Dell's sales force is demanding Opteron-based server offerings to be able to better compete in the market."

And now this week, another analyst has put his head on the block, narrowing that prediction to next month.

"We believe there will be an AMD/Dell deal announced very soon; more specifically, we believe it will come as early as March," according to Doug Freedman, from American Technology Research in a note to his clients, as we reported yesterday. He is claiming that deal with start on the notebook front and "will likely mature from there to include servers and desktops, in that order, in subsequent months."

At this rate, you can expect AMD-powered Dell systems to launch yesterday and be available globally by breakfast time tomorrow. And to start on the notebook front? That seems an odd choice doesn't it? AMD's server and desktop chips are generally seen as more advanced (and cheaper), but most experts will say that that Intel's notebook line-up is stronger - both technologically and in market terms. Why then would Dell choose AMD notebook chips?

So what's the big deal if they do hook up? Not much actually - except maybe for AMD, but it does bring an end to Dell being the last big, Intel-only systems manufacturer. Why has it stayed loyal? Well, there's probably few hundred million reasons but Mickey and Bugs Otellini are keeping that one to themselves.

When this is decided it will be on Dell's terms. What needs to be asked is whether or not Dell has finally been convinced of the need to start using AMD chips? So far, it's ignored everything that AMD has presented. Despite the innovation trundled out by AMD over the years, not least of which was the big lead in 64-bit desktop/server technology, Dell has steadfastly looked the other way. More importantly, it has waited for Intel to do something to catch up. The world is notebook crazy and will continue to be so, which means Dell should be happy with Intel's Centrino and other chips. Intel has also clawed back some of the performance gap on the desktop front and new desktop and server offerings are on the way later this year. Even the fact that AMD processors are cheaper has not made Dell change its stance.

Dell has always publicly claimed that it would not use AMD chips because the company could not produce enough. And that's still the case - AMD is already hard pressed to keep up with existing customer demand. Has it a secret production plant squirreled away that we don't about? Nope.

Realistically, if Dell decides to give AMD a chance, it's going to be small potatoes to start - maybe one high-end gaming PC or server. In Dell terms it will be tiny but for AMD, just watch that share price rocket even higher. Anyway, the landing of Dell is more than about just money, it a symbolic victory: the lucky stone in David's sling that brought Goliath crashing down. Anyway, wasn't that just a biblical fairy tale? And isn't Dell/AMD just a rumour? µ

See Also
Apple and AMD: A match not meant to be