AMD taps into new frontiers

AMD taps into new frontiers

AMD is securing strategic relationships with global hardware vendors in an effort to penetrate non-traditional markets such as the corporate and education sectors.

After 12 months of solid performance, the chipmaker announced its return to profitability in Q4 for the first time since Q2 2001. For the period ending December 28, AMD reported net income of $US43 million on revenue of $US1.2 billion. This compared with a net loss of $US855 million on revenue of $US686 million in the fourth quarter of 2002.

AMD country manager for A/NZ, John Robinson, said the chipmaker had also increased its share in the local whitebox market over the past 12 months to about 35 per cent.

That market remains critical to AMD’s Australian business strategy and is integral to its focus of penetrating non-traditional areas.

In August, AMD partnered with Melbourne-based integrator Paragon Systems to win the PC portion of a wide-ranging Department of Education and Training (DE&T) tender for PCs, servers, printers, UPSs and network switches.

“It was a strategic win for us because we hadn’t occupied that [education] space at all,” Robinson said. “AMD’s growth in 2004 will come from these non-traditional areas.”

Over the past three years AMD Australia has been lobbying heavily to the Australian government both at state and federal levels. Robinson said it was starting to pay off.

“Three years ago, every government tender that went out would demand Intel-based solutions,” he said. “The AMD platform was never mentioned. Today they ask for Intel or an equivalent. They now acknowledge the alternatives.”

This year, Robinson said AMD would focus on developing strategic relationships with global players in order to further penetrate the corporate and education sectors.

“We will be fostering our relationships with IBM and Sun Microsystems which have adopted the 64-bit and 32-bit Opteron processor for their server and workstation products,” he said.

“We’re also working with HP, Acer and Fujitsu on desktop and mobile activities. For the first time Acer has launched products in Australia with the AMD platform.”

Robinson said alliances with the heavyweights were already proving productive.

“HP is doing extremely well with the AMD platform in the consumer space,” he said.

AMD’s Australian operations contributed to its strong Q4 results, Robinson said. This was mainly due to pricing stability and the strong Australian dollar.

“There’s been a slowdown in price erosion over the last couple of years and greater price stability on both sides of the fence,” he said. “While our prices haven’t dropped, our shipments have continued to increase. Price erosion doesn’t necessarily increase your business.”

AMD’s channel focus for 2004 will be on building and promoting its 64-bit processor business through its channel partners. The chip manufacturer has launched promotional programs for both end-users and resellers to encourage uptake of the Athlon 64FX CPU.

The company reduced distribution partners from three to two in May 2003 when it culled Digiland. Its remaining distributors are Avnet and Legend Performance Technology.

Robinson said that in future AMD might revert back to three distributors but had no immediate plans to do so.

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