Originally posted by: Pariah
(emphasis added)
They're making money on their CPUs and gaining sales. They lost $110 million on the flash memory division last quarter, which is why they posted a net loss.
So because they weren't CPU related, those losses don't count? I bet they do to investors and company executives. The health of the company factors in all divisions, not just one.
I didn't mean to imply they "don't count", but from what I've read the losses they took in Q105 were not really their fault -- the market is flooded right now and prices are terrible. I don't know how many (if any) flash memory manufacturers posted a profit in the last quarter, but I doubt it's a large number. It's unfair and misleading to discount the success of their CPU manufacturing division because market forces beyond their control hosed the memory profits.
I disagree that corporate people care about performance first and foremost. Few companies buy CPU's, they buy solutions. What's actually in the box that IBM or whoever provides is of little consequence.
It's true that they care about the whole package -- but in a lot of
server situations, performance and price/performance on the hardware are an important part of that package. And right now, for a lot of applications, you can build a faster and/or cheaper server with Opteron processors than Xeon.
If you're buying a thousand desktops, which parts are in them is almost irrelevant, because they're all blazingly fast for office work -- service and support costs over the lifetime of the system will overshadow the relatively low price of the hardware (that whole TCO thing everyone likes to talk about).
Despite AMD's gains, which are somewhat overblown since they started from nothing at all, Intel still owns the market.
I'd say it's almost more impressive to go from "nothing" to having a small but noticeable (and growing) chunk of market share. It's very tough to push out entrenched systems unless you have a significant technical edge. They're still a minority in the market by *far* -- but considering how much bigger Intel is than AMD, they should be crushing them, and they're losing ground instead.
The only place they're being outmarketed is in the desktop OEM market, because most consumers know "Intel/Pentium/Celeron/Centrino" but not "AMD/Athlon". They just don't have the kind of advertising and marketing budget that Intel does, although I agree they could do a lot better.
Marketing encompasses much more than making a corny commercial with blue guys acting like idiots. It's about creating an image for the company, something Jobs has done a phenomenal job of with Apple since he retook over. There was a thread here recently about an article that stated that AMD is viewed as an unstable budget platform compared to Intel. This was true 5 years ago, though certainly not now. It's AMD's fault that they have done nothing to try and change the public's perception about this. This view does not only hurt home sales, but corporate as well. No boss (who is rarely the most technically inclined in the company) is going to want to buy unstable budget solutions from the also-ran even if the benchmarks are better for their company. AMD's awful support for the Athlon MP line, their first attempt at business users, certainly didn't instill any additional confidence in customers either.
I agree; they have not done much to change their 'unreliable' image (much of which was due to shoddy motherboards/chipsets a few generations back rather than issues with the CPUs themselves) or get their name out there and establish any sort of brand/image. And Intel does a much better job getting and holding OEM contracts (see, for example, Dell).
But if AMD continues their success in the server and enthusiast market and keeps pushing themselves as a solid OEM supplier, I think they'll start to see more success in both business and home desktops. Unless Intel can pull out some amazing technical improvements real fast and AMD can't match them.