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AMD holding off on tablets, admits iPad cannibalizing notebooks

post #1 of 66
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AMD Chief Executive Dirk Meyer weighed in on the iPad's impact on sales of netbooks and notebooks, surmising that Apple's tablet has cannibalized both. Meanwhile, the company is waiting for the market to develop before committing R&D resources to developing tablet processors.

The Associated Press covered Meyer's response to a question on tablets' impact on netbook sales during an earnings call Thursday. "Clearly, in the last quarter or two, the tablet has represented a disruption in the notebook market," said Meyer. "If you ask five people in the industry, you'll get five different answers as to what degree there's been cannibalization by tablets of either netbooks or notebooks."

"I personally think the answer is both, and given the pretty high price points of the iPad, there's probably some cannibalization even of mainstream notebooks," he continued.

AMD posted a loss of $118 million for the quarter, a slight narrowing of last year's third-quarter loss of $128 million.

According to Meyer, the tablet opportunity is a long term one for the Sunnyvale, Calif., company, which is second only to Intel in shipments of x86 microprocessors. "Even though tablets like Apple's iPad are eating into demand for laptops, AMD will hold off on investing to develop microprocessors for that market until it grows more," Reuters reports Meyer as saying.

"Frankly we're still so small in the notebook market that given all of the opportunities in front of us it doesn't make sense for us to start turning R&D dollar spending towards the tablet market yet," he said.

Meyer is the latest of several high-profile CEOs to warn investors about the so-called "iPad effect." Last month, Best Buy CEO Brian Dunn caused a stir when he hinted that some sales of netbook models at the retailer had dropped off as much as 50 percent since sales of the iPad began. Dunn quickly retracted the comments, jesting that "the demise of these devices are grossly exaggerated." Earlier this week, Intel CEO Paul Otellini conceded that the iPad and other tablets may be chipping away at PC margins.

Third-quarter sales figures published this week by IDC and Gartner corroborated the impact of the iPad on the PC market. According to IDC's calculations, Apple overtook Acer to claim the number three position in the U.S. market. Number one HP saw lackluster growth of 2.7 percent, while second-place Dell saw shipments decline 4.9 percent year over year.

The iPad effect seems to work both ways. "Apple's influence on the PC market continues to grow, particularly in the U.S., as the company's iPad has had some negative impact on the mininotebook market," said Bob O'Donnell, IDC vice president for Clients and Displays. "But, the halo effect of the device also helped propel Mac sales and moved the company into the number three position in the U.S. market."

According to Gartner, sales of low-priced notebooks and mini-notebooks slowed over the quarter after several years of very strong growth. Mikako Kitagawa, principal analyst at Gartner, sees the buzz surrounding Apple's iPad as a contributing factor to the recent slowdown in netbook purchases. "At this stage, hype around media tablets has led consumers and the channels to take a 'wait and see' approach to buying a new device," Kitagawa said.

Unverified reports have suggested that Apple and AMD might have a partnership in the works. In April, unconfirmed rumors surfaced that the two companies' executives were meeting to discuss plans to use AMD microprocessors in some of Apple's forthcoming products.
post #2 of 66
So their master plan is to spend the next few years trying to beat Intel in the laptop market and then they will start to focus on tablets??? Good luck with that.
post #3 of 66
Quote:
Originally Posted by AppleInsider View Post

...Meanwhile, the company is waiting for the market to develop before committing R&D resources to developing tablet processors.

Hmmm... with the millions of iPads that have been sold in the six months it's been on the market, I'd say that the market has "developed" quite nicely.

Sounds like another company - software or hardware - that decided it was best to shut down their R&D and just sit back and let Apple do all the development for them.

Is it any wonder why previous tablet / slate / whatever sales never took off for the past couple decades??
post #4 of 66
The PC side's strategy reflects not only Microsoft's impotence in developing a platform that is truly mobile/tablet worthy, but also points to the lack of other options, and that includes bloated Android.

Perhaps HP may make a dent in that reality with its coming tablet OS. However, by the time any traction occurs for these other players, Apple's iPad will be deeply imbedded in the psyche of the consumer. Game, Set, Match.
post #5 of 66
"Pretty high price points"??

Um, what?? The iPad is at a super-low price point, which is one of the reasons it has taken off so quickly.
post #6 of 66
I think it makes sense for AMD to be hesitant with the tablet market for the time being. The majority of tablets in the near future all use ARM processors to have competitive battery life. I wonder how Fusion will fare against intel's mobile platform.
post #7 of 66
Quote:
Originally Posted by nuxiz View Post

I think it makes sense for AMD to be hesitant with the tablet market for the time being. The majority of tablets in the near future all use ARM processors to have competitive battery life. I wonder how Fusion will fare against intel's mobile platform.

AMD is taking a bit of a risk, Fusion is their main strategy for laptop and desktop and taking on Intel at Atom, Core, etc. They know they can't compete with anything ARM is suited for over the next several years. AMD better execute on Fusion perfectly, otherwise, big trouble. Can't depend on ATI too long to do the heavy lifting.
post #8 of 66
// AMD Chief Executive Dirk Meyer weighed in on the iPad's impact on sales of netbooks and notebooks ... Meanwhile, the company is waiting for the market to develop before committing R&D resources to developing tablet processors. //

I suspect this is not entirely true. I would be very surprised if the R&D department is not frantically exploring Tablet options.

Mr Meyer and the rest of the PC business did not expect the iPad to be such a huge success from the outset. The iPod took 2 years to reach 1 million sales, so to sell the same amount of the more expensive iPad over the first week, will have caught these companies completely off guard.

Their policy initially might have been to wait and see, but after that first weekend, they will have been desperately playing catchup.
post #9 of 66
come on people. You know and I know that intel and AMD are scared to death of the ipad because it is kicking the tail of a product they dump their effing chips into. The pc
They also know that Apple has dropped a paradigm shift into this game.
Apple has taken away the average user from the pc with the ipad because the ipad concentrates what the average person does into a no fuss, powerful, fast and hell of capable system.
Ballmer is sweating bullets and so are his OEMS.
And the ipad gets no viruses. No god**** Norton anti virus ad popping up and pissing off my girlfriend. Nothing. No pop ups!!!! Yeah!!!!
Sorry for all you MS certified techs.
My pose:
*iphone 4 16 gig
*2 ghz Al macbook before becoming the macbook pro
*1 ghz g4 imac 17 inch flat screen(soon to be kicked to the curb for the 21.5 inch imac)
*ipad 16 gig wifi +3G(I told my girlfriend I was going to buy the 64 gig wifi+3G for my birthday back in September but she surprised me. Damn! Beggars can't be choosers)
Windows machine?HHHHHHHHHHHHHHHHHEEEEEEEEEEEEEEEEEEELLLLLL LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL LLLLLLLLLLLLLLL NNNNNNNNNNNNNNNNNNNNOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO OO!!!!

Thank you!
post #10 of 66
If you're not in the mobile game, you're doing it wrong.
post #11 of 66
Amd's position makes perfect sense to me. They aren't going to match the performance/watt of arm any time soon and it's not clear what os would run on their chip anyway. AMD is a cash strapped company -- they need to focus on thongs that actually might work out for them. Probably makes more sense for them to make a processor that could find it's way into macbooks and iMacs.
post #12 of 66
Quote:
Originally Posted by maccherry View Post

come on people. You know and I know that intel and AMD are scared to death of the ipad because it is kicking the tail of a product they dump their effing chips into. The pc
They also know that Apple has dropped a paradigm shift into this game.
Apple has taken away the average user from the pc with the ipad because the ipad concentrates what the average person does into a no fuss, powerful, fast and hell of capable system.
Ballmer is sweating bullets and so are his OEMS.
And the ipad gets no viruses. No god**** Norton anti virus ad popping up and pissing off my girlfriend. Nothing. No pop ups!!!! Yeah!!!!
Sorry for all you MS certified techs.
My pose:
*iphone 4 16 gig
*2 ghz Al macbook before becoming the macbook pro
*1 ghz g4 imac 17 inch flat screen(soon to be kicked to the curb for the 21.5 inch imac)
*ipad 16 gig wifi +3G(I told my girlfriend I was going to buy the 64 gig wifi+3G for my birthday back in September but she surprised me. Damn! Beggars can't be choosers)
Windows machine?HHHHHHHHHHHHHHHHHEEEEEEEEEEEEEEEEEEELLLLLL LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL LLLLLLLLLLLLLLL NNNNNNNNNNNNNNNNNNNNOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO OO!!!!

Thank you!

You summed it up very well
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Enjoying the new Mac Pro ... it's smokin'
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post #13 of 66
"the company is waiting for the market to develop"

Waiting for Apple to sell a few million more units.
Waiting for the opportunity to pass it by.
Waiting for Intel to eat its lunch.
Waiting to fail.
post #14 of 66
Once lower cost Android tablets hit the shelves, you'll really see netbook sales taking a hit. The big challenges for these newcomers will be build quality and processor performance. But if they nail those, I'm sold.
post #15 of 66
Can we stop using "cannibalizing", please? You're being out-competed; this isn't stealing from Peter to pay Paul.

Did laptops cannibalize desktop sales? Did the Apple II cannibalize calculators? Did calculators cannibalize ledgers? Good grief, heaven forbid somebody get tablets right.
post #16 of 66
And is waiting for apple to switch to them circa 2011 2012, period.
post #17 of 66
Please stop perpetuating the misuse of the term "cannibalizing". Cannibalizing occurs only when a company's product takes away sales from its other products. The iPad might be cannibalizing some MacBook sales but it is **displacing** sales of rival companies' netbooks and notebooks.
post #18 of 66
so, let me get this straight: notebook and netbook makes are mad because Apple is outselling them with a superior product. Isn't that how our economy works? What is Apple supposed to do, stop selling the iPad so the industry can make more money? I'd say the market is progressing nicely, and perhaps these makers that are complaining should concentrate on making a better product, especially the ultra crappy netbook!
post #19 of 66
This approach is even worst than Microsoft's which is to get blind sided by Apple delivering a perfectly integrated software - hardware product with an easy and large amount of content. AMD will not will a race by sitting in the stands and watching.
post #20 of 66
Quote:
Originally Posted by Blastdoor View Post

Amd's position makes perfect sense to me. They aren't going to match the performance/watt of arm any time soon and it's not clear what os would run on their chip anyway. AMD is a cash strapped company -- they need to focus on thongs that actually might work out for them. Probably makes more sense for them to make a processor that could find it's way into macbooks and iMacs.

Exactly. AMD makes chips. They don't make OSes or app stores or negotiate deals with record companies or movie studios or make touch panels. The iPad's success is due to a complex recipe of which the CPU is but a small part.

AMD is much smaller than Intel, they only have so many resources, and their resources are committed to other market segments for the near term. Nothing wrong with that.

Desktop & laptop CPUs will continue to be a very large market. They're not going anywhere due to the rise of tablets. Tablets are like phones; they are another device people are adding to their stable of digital toys.

- Jasen.
post #21 of 66
Quote:
Originally Posted by kerryb View Post

This approach is even worst than Microsoft's which is to get blind sided by Apple delivering a perfectly integrated software - hardware product with an easy and large amount of content. AMD will not will a race by sitting in the stands and watching.

Nor should they, but blaming Apple for their problems is not the answer.
post #22 of 66
Quote:
Originally Posted by TNSF View Post

So their master plan is to spend the next few years trying to beat Intel in the laptop market and then they will start to focus on tablets??? Good luck with that.

They are losing money each quarter so cost centers are the first to go. I dont think its a good idea for the future of the company, but if they dont think it will produce a decent mobile chip then perhaps they are right.
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post #23 of 66
Quote:
Originally Posted by maccherry View Post

Apple has taken away the average user from the pc with the ipad because the ipad concentrates what the average person does into a no fuss, powerful, fast and hell of capable system.

Nice!

.
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post #24 of 66
Quote:
Originally Posted by rufwork View Post

Can we stop using "cannibalizing", please? You're being out-competed; this isn't stealing from Peter to pay Paul.

Did laptops cannibalize desktop sales? Did the Apple II cannibalize calculators? Did calculators cannibalize ledgers? Good grief, heaven forbid somebody get tablets right.

Aren't cannibals from the Far East?

.
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post #25 of 66
Quote:
Originally Posted by Mister Snitch View Post

"the company is waiting for the market to develop"

Waiting for Apple to sell a few million more units.
Waiting for the opportunity to pass it by.
Waiting for Intel to eat its lunch.
Waiting to fail.

AMD may have not been doing veyr well in the recent years, but, they made the first real quad-core proccessor, and were ahead for years with there athlon's until core duo came out, its certainly not going as well as it is now anymore, but saying that it just waits for other companies to make products is just silly...

October, 1994- AMD makes its K5, its 30% faster then intels current pentiums

march, 1998- AMD had arpox 47% of market, Intel 42

october 1998-first details in AMD of HyperTransport, a replacement for the PCI bus

AMD certainly had not been ahead of inel a lot, but they did have there times when it has been ahead and better than intel

i would advise researching a company before slamming them

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if i say something confusing please tell me!

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PC means personal computer.  

i have processing issues, mostly trying to get my ideas into speech and text.

if i say something confusing please tell me!

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post #26 of 66
Quote:
Originally Posted by Dick Applebaum View Post

Aren't cannibals from the Far East?

.

Yes. New York is about as far East as it gets.

Proud AAPL stock owner.

 

GOA

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GOA

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post #27 of 66
Quote:
Originally Posted by nicolbolas View Post

AMD may have not been doing veyr well in the recent years, but, they made the first real quad-core proccessor, and were ahead for years with there athlon's until core duo came out, its certainly not going as well as it is now anymore, but saying that it just waits for other companies to make products is just silly...

October, 1994- AMD makes its K5, its 30% faster then intels current pentiums

march, 1998- AMD had arpox 47% of market, Intel 42

october 1998-first details in AMD of HyperTransport, a replacement for the PCI bus

AMD certainly had not been ahead of inel a lot, but they did have there times when it has been ahead and better than intel

i would advise researching a company before slamming them

Technology moves ahead so fast in the microprocessor industry that success is determined primarily by your R&D. It is very hard to kick Intel off the top of that mountain because no one out-Rs and out-Ds them. The only time Intel fell behind AMD was when Intel made a strategic blunder with their product roadmap and had to backtrack and follow AMD's lead. But such an advantage is temporary because pretty soon the next generation of chip designs comes up and again its R&D that determines who wins. A strategy that depends on your competitors making strategic blunders is not a sustainable strategy.
post #28 of 66
Quote:
Originally Posted by Blastdoor View Post

Amd's position makes perfect sense to me. They aren't going to match the performance/watt of arm any time soon and it's not clear what os would run on their chip anyway. AMD is a cash strapped company -- they need to focus on thongs that actually might work out for them. Probably makes more sense for them to make a processor that could find it's way into macbooks and iMacs.

They might as well close their doors if they take that strategy. If this article is correct and AMD is taking a wait and see attitude towards the tablet (read: mobile) industry then they are already 5 years behind.

Think of where the iPad/tablet industry will be in 5 years... wanna bet that computer sales won't be cut drastically by then?! I'll take that bet. Computer sales will be 60% of what they are today, if not less. How many hard wired phones do you see these days... same sort of thing. Typewriters... etc.

Close the doors and give the money back to the shareholders if wait and see is their plan...
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post #29 of 66
Quote:
Originally Posted by tundraboy View Post

Please stop perpetuating the misuse of the term "cannibalizing". Cannibalizing occurs only when a company's product takes away sales from its other products. The iPad might be cannibalizing some MacBook sales but it is **displacing** sales of rival companies' netbooks and notebooks.

Journalism is dead.

Tech media no longer employs writers.
post #30 of 66
Quote:
Originally Posted by scotty321 View Post

"Pretty high price points"??

Um, what?? The iPad is at a super-low price point, which is one of the reasons it has taken off so quickly.

I think most computer vendors expect the iPad and other tablets to supposedly being available at netbook prices. I believe they really see tablets as some sort of keyboard-less netbook instead of being a smartphone-class device with a much larger screen. A thin, light tablet is more a smartphone than a netbook, component-wise.
post #31 of 66
Quote:
Originally Posted by Constable Odo View Post

I think most computer vendors expect the iPad and other tablets to supposedly being available at netbook prices. I believe they really see tablets as some sort of keyboard-less netbook instead of being a smartphone-class device with a much larger screen. A thin, light tablet is more a smartphone than a netbook, component-wise.

Maybe they expect that now, but they expected something very different back in January. CES was filled with tablets, most not giving price points as they were waiting to see what Apple did later that month. Most were expecting an Apple tablet around $1000, so when Apple came out with a product half that price and with a specialized UI designed for the device they all had to go back to the drawing board. How else do you have a decade old market category that is dominated and owned by a single tablet? Heck, one might argue that the Kindle is Apples biggest competitive threat to that form factor and that isnt even in the same category
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post #32 of 66
Quote:
Originally Posted by TNSF View Post

So their master plan is to spend the next few years trying to beat Intel in the laptop market and then they will start to focus on tablets??? Good luck with that.

Yeah, when I read "waiting for the market to develop" I read it as "waiting for others to get their first, establish a beachhead, and begin to dominate the market" before entering.

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post #33 of 66
Quote:
Originally Posted by tundraboy View Post

Please stop perpetuating the misuse of the term "cannibalizing". Cannibalizing occurs only when a company's product takes away sales from its other products. The iPad might be cannibalizing some MacBook sales but it is **displacing** sales of rival companies' netbooks and notebooks.

Cannibal-gate!

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post #34 of 66
Quote:
Originally Posted by TNSF View Post

So their master plan is to spend the next few years trying to beat Intel in the laptop market and then they will start to focus on tablets??? Good luck with that.

AMD let it slip that they are releasing a new graphics product line next week. coincidence?
post #35 of 66
It is sort of a chicken/egg situation. CPU chip makers can't design a good mobile chip because they can't optimize it for any particular OS and an OS developer like MS can't design a good OS for mobile because they don't know what hardware it is going to run on.

That is why Apple's mobile devices are so seamlessly efficient. They optimize both hardware and software to only coexist with each other and no other configuration matters. In mobile, it is such a delicate balance due to the battery usage, heat and weight considerations that without extreme optimization it wouldn't have that magical quality that Apple does so well.

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post #36 of 66
Quote:
Originally Posted by nicolbolas View Post

AMD may have not been doing veyr well in the recent years, but, they made the first real quad-core proccessor, and were ahead for years with there athlon's until core duo came out, its certainly not going as well as it is now anymore, but saying that it just waits for other companies to make products is just silly...

October, 1994- AMD makes its K5, its 30% faster then intels current pentiums

march, 1998- AMD had arpox 47% of market, Intel 42

october 1998-first details in AMD of HyperTransport, a replacement for the PCI bus

AMD certainly had not been ahead of inel a lot, but they did have there times when it has been ahead and better than intel

i would advise researching a company before slamming them

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post #37 of 66
Quote:
Originally Posted by island hermit View Post

They might as well close their doors if they take that strategy. If this article is correct and AMD is taking a wait and see attitude towards the tablet (read: mobile) industry then they are already 5 years behind.

Think of where the iPad/tablet industry will be in 5 years... wanna bet that computer sales won't be cut drastically by then?! I'll take that bet. Computer sales will be 60% of what they are today, if not less. How many hard wired phones do you see these days... same sort of thing. Typewriters... etc.

Close the doors and give the money back to the shareholders if wait and see is their plan...

True. Another problem is that if they wait until the market is mature, it may well be all divvied up, with no piece of the pie left for AMD to take.
post #38 of 66
Quote:
Originally Posted by mstone View Post

It is sort of a chicken/egg situation. CPU chip makers can't design a good mobile chip because they can't optimize it for any particular OS and an OS developer like MS can't design a good OS for mobile because they don't know what hardware it is going to run on.

Nonsense.

ARM has created a very successful business architecting mobile CPUs. They don't know what operating system is going to run on their CPUs (iOS, Android, Symbian, BlackBerry OS, webOS, whatever).

The fact of the matter is that Intel and particularly AMD have relied too long on general purpose CPUs for desktop systems, and ignored the mobile marketplace.
post #39 of 66
This is how Apple compete.

instead of releasing some me too netbook, they studied the market, understand their customers, and release something worthwhile (iPad).

Now their competitors are scrambling to release some me too iPad clones.
post #40 of 66
What "other tablets"?
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