Re: Where will AMD go to increase revenues? What new markets are they developing ?
Actually, this is a simple question for AMD. They have nearly 100% of the lucrative server market to go after and nearly 100% of the lucrative business PC market to go after. They also have a profitable network component business that they are growing and a network appliance market that they are entering.
Contrast that with Intel. It can only lose server market share, it can only lose business PC market share, and in stark contrast to AMD's profitable "other" divisions Intel is hemmorhaging money in the non PC/cpu areas it is attempting to enter.
The focus of many AMD investors on Intel is due to Intel's past practices. In areas where another company seemed to be developing a competitive product, Intel would dump similar product into the market to drive the competitor out of that business. AMD has to knock Intel out of the markets in which it wants to compete. These are the rules invented by Intel, it's not AMD's fault if AMD is looking like it may be better at that particular game.
I'm not complaining about the way Intel has been playing the game, just saying that for the last year AMD has been playing it better. Intel has been able to use profits from the high end CPU to drive all other aspects of its business, now it's looking like AMD is going to take that advantage away.
This is a really bizarre market where products with nearly identical costs of production vary in price from $40 to $1,000. Intel once owned all of the high end and could always use the earnings from its $1,000 chip sales to drive the rest of the business. AMD has taken the smallest part of that high end business (high end retail) from Intel. Next it will go after high end business sales, finally server sales.
AMD has a really straightforward strategy for growth. Now look at Intel. It's competing with its own customers for web hosting business, its other customers for servers and Cisco for Internet Infrastructure. And it's already lost about a Billion dollars so far this year trying to do that.
Dan
PS - I almost forgot, but, as you pointed out, AMD also has the high end notebook market waiting for it. And AMD is already making record profits without any of these markets! |
