Over $1 million of AMD stock held by its former distributor APD International may not be covered by warranty. APD International was one of AMD's largest distributors until last month when the vendor unexpectedly terminated the agreement and refused to inform the market on the reasons for the decision. Speculation has attributed the split to anything from marketing rebate scams to grey marketing to over-clocking, all of which are vehemently denied by the distributor.
APD International director Ngat Doen said he was unwilling to comment any further on the issue. Legal action is pending, however, and he confirmed that his solicitor is handling the matter.
Doen said APD still had over $1 million worth of AMD stock to sell off, which APD had purchased prior to the termination of its distribution agreement, but he is confident the stock will be sold. "We will sell it, no worries," Doen said. "We used to sell a million [dollars] worth in half a day."
Despite Doen's confidence, there is a danger for buyers that this stock may not be covered by AMD's warranty. John Robinson, managing director of AMD Australia and New Zealand, said AMD provides warranty support for any product supplied by a legitimate source. Any product purchased from APD International prior to AMD dumping the distributor in mid-April is thus covered by the vendor. But as of the termination of the distribution agreement, Robinson no longer sees APD as a "legitimate source" of AMD product.
Potentially, this leaves the million dollars of stock without support. But Doen does not agree: "AMD still has a warranty for it."
Robinson explained that for a warranty to be honoured, the customer must take the product back to its original supplier, who then approaches the vendor. If AMD can verify the product was procured within the terms of the vendor's supply arrangements, the warranty is honoured. "If someone comes to me asking for details on a warranty issue, we tell them to go back to the point of purchase," he said.
"They [APD] have to provide some form of cover for any products sold outside of our relationship," Robinson said.
Robinson said that there are no plans in place at present to appoint a distributor to fill the void. "Even before this decision, we were and are continually assessing the situation with distribution," he said. "If we see an opportunity, we will appoint someone."