What’s next for AMD?
Right now, the company is not in a pretty place. AMD just posted some terrible numbers for the third quarter of 2012, and it’s getting ready to lay off 15 percent of employees (1,700 jobs). So, yeah, it’s time to make some changes.
While the company still has the potential to recover, it will have to expand its reach into the mobile arena if it hopes to be strong again. AMD did recently release Hondo, a chip for tablets, but the chip only works for Windows devices. What about the vast world of Android?
The company’s problems extend beyond a lack of a real plan for the mobile market. AMD has traditionally competed with Intel by making its chips available at a lower price than the market leader. Unfortunately for AMD, Intel is becoming more competitive with its price point, and Intel’s performance provides the better value.
AMD faces other challenges in shrinking markets and with manufacturing issues, but the tech market on the whole has to consider what will happen if AMD falls too far behind. Sure, another company could buy it out, but Qualcomm already owns AMD’s mobile graphics IP (intellectual property). And, if we’ve learned anything with the vastly shifting market of buyouts, it’s that a company without any patents or IP will struggle to sell.
If AMD does disappear completely, suddenly we’ll be left with only Intel in the x86 market. And if Intel has no competition, why would the company bother keeping prices reasonable?
AMD needs to step it up – not just in the PC market but also in the mobile market. The company bought Sea Micro in order to help it with the potential manufacturing of mobile devices, though the growth into actual hardware and not just chips could take a lot of time and money. Time and money that the company may or may not have.
But what’s the alternative? Simply wait and hope things get better? AMD has to make the move now, while it still has the resources to make a dent in the market. Waiting could be the costliest mistake of all.
AMD faces the still competition of Intel in the PC world, and it would likely face an uphill battle against ARM in the mobile world. Will AMD be up to the challenge? For the sake of the new management team, they’d better hope so.
Source: Venture Beat