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AMD Adds Compaq Fuel To Fire
( 1/05/98; 8:48 p.m. EST)
By Kelly Spang, Computer Reseller News <Picture>More fuel will be added to Advanced Micro Devices' (AMD) fire tomorrow when Compaq Computer announces four PCs based on the AMD K6 processor line.
The Houston, Texas-based Compaq will introduce four Presario computers based on the AMD K6 processor as PC makers continue to explore alternatives to Intel for low-end systems.
Leading PC makers, including Compaq and IBM are diversifying their product lines beyond Intel processors as the price of PCs plummets below $1,000. While Intel's Pentium MMX processors will drop below $200 with a scheduled price cut later this month, the Santa Clara, Calif.-based chip maker will attack the entry-level market head-on with a modified version of its Pentium II later this year.
To reach low-end prices, Intel will remove the level 2 cache from the Pentium II in a 266-MHz version by the third quarter. Pricing for these processors is expected to be around $200, but will drop downward toward $100, sources said.
Into 1998, however, AMD will continue its strategy to undercut Intel on price while aiming to offer VARs a better price-performance equation.
"AMD's strategy is we want to play in the mainstream," said Thomas Toles, AMD field marketing manager in a recent interview. "We are not positioned at the entry-level or the super high end. We make microprocessors for the masses."
While in 1997 AMD struggled to keep up with demand, VARs can expect processor availability in the channel to increase tenfold this quarter, Toles said.
Additionally, leading notebook makers are expected to announce systems based on the K6. The rollout of the mobile processors coincides with AMD's move towards .25 micron technology which will allow the Sunnyvale, Calif.-based chip maker to achieve higher speeds while generating less heat, Toles said.
In the first half of 1998, AMD will migrate its processor line to the .25 micron process with the 266-MHz and 300-MHz K6 based on this new technology. There will be some overlap with the 233-MHz K6 already available in the channel as AMD starts to the transition towards .25 micron. To date, the 233-MHz K6 is manufactured at .35 micron.
The 266-MHz K6 is already in samples and the 300-MHz samples will be available this quarter, said AMD officials.
As AMD launches new processors, they will be delivered to the channel via AMD's box processor program launch in the fall. This quarter, AMD will also launch a 10-city seminar series jointly with Microsoft to help VARs understand how to make money using AMD, while also providing tips on generating more business, Toles said.
These seminars will likely continue throughout the year, though AMD will evaluate resellers' response after the first batch, he said.
To date, AMD has more than 12,000 resellers. In the last quarter alone, the chip maker saw a 20 percent increase in its channel program, officials said. <Picture: TW>
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