AMD splits with largest distributor

AMD splits with largest distributor

PC processor vendor Advanced Micro Devices (AMD) has ended its relationship with distributor APD International, the company responsible for a substantial share of AMD sales in Australia and New Zealand.

AMD country manager John Robinson confirmed that the relationship was over, but would not comment further. He said it was premature to speculate on whether AMD would appoint a new distributor or adjust its relationships with existing distributors to maintain its sales figures. At present, AMD continues to work with distributors Legend Performance Technology and Avnet Australia.

A source close to AMD speculated that the reason for the split was the vendor's growing distaste for grey marketing activities. He also said the vendor was unhappy about "forward selling" practices that motivated resellers to stock up on AMD products in bulk, making it difficult for AMD to market new models at a later date.

Robinson refused to comment when asked whether grey marketing or channel stuffing played any part in separation, while APD International's local managing director Ngat Doan said the distributor had never engaged in such a practice. "I am [an] authorised distributor," he said. "Why would I do grey marketing?"

"It was a business decision," Doan said. "We have different ideas of ways to do business."

Doan said the distributor will announce new vendor partners in a couple of weeks.

IDC analyst Logan Ringland was not able to provide the most recent statistics on PC processor market share, due to be released in a matter of weeks, but he did say the turbulence in AMD's channel was "of little surprise".

According to arch-rival Intel, the decision will result in a major sales void for AMD. The vendor will need to find a new distributor or considerably expand relations with existing distributors to replace the tens of millions of dollars per year in sales that were attributed to APD.

"Intel's stated claim this year is to take market share off AMD," said Intel's area sales manager, distribution, Phil Cronin. "It appears as though we are doing that. The pressure is on for sales and AMD appears to be saying that if existing distributors don't want to commit to maintaining market share, then it will find someone who does."

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