Window of Opportunity Closing for AMD

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Though AMD has done, and continues to do, everything right that is within their power there are simply too many issues to deal with to guarantee a smooth launch without spending many millions of dollars. This is one area where AMD simply cannot compete with Intel. It is now up to the marketplace to determine the fate of AMD.

Further complicating the situation is the fact that at least one motherboard manufacturer has pushed the release date for their Slot A board indefinitely until the perceived AMD chipset issues are resolved. Intel is exceptionally good at spreading and promoting the Fear, Uncertainty and Doubt principle (called FUD) when it serves their purposes, and this situation is no exception. There are so many conflicting reports about what the problems are that manufacturers and end users really have no clear picture of what is happening, and AMD is not helping themselves much by continuing with their traditional tight-lipped practice.

By all accounts, Intel will be releasing up to 18 new processors in October, including the .18 micron Coppermine line. These will be quickly ramped up beyond 700MHz, primarily to directly compete against the Athlon. Of even greater concern for AMD is the fact that the FCPGA package reportedly saves Intel approximately $40 per processor. This gives Intel room to either reduce their prices even further and maintain profitability, or spend that extra money on the promotion of their new offerings through incentives and advertising.

At this time, only three manufacturers have approved motherboards for the Athlon (Gigabyte, MSI and FIC). While MSI has motherboards in the market, sales have been lackluster because of the problems reported. Both Gigabyte and FIC will be officially releasing their boards in mid- to late September. Most other manufacturers will not even be sampling boards until then. In addition, even Gigabyte and FIC will have limited production runs of their current boards, and will be following up with new designs in October. VIA will reportedly have their KX133 chipset available by then, however this means motherboards will likely not be ready until late November at the earliest.

Unless the situation turns around very quickly with the Slot A motherboards, AMD may find themselves having lost a very big window of opportunity. The Christmas season is typically considered very important for manufacturers and retailers alike. AMD has some serious financial issues to deal with, and missing this Christmas season could be the final blow. It is extremely important for motherboards to be available very soon, and in reasonable quantities. So far, this looks like it may be a problem for AMD.

If the marketplace acceptance is very good for early motherboards, this could all end up being only a short term issue because other manufacturers will want to get in on the action. The delay caused by this could actually end up working in AMDs favor, strangely enough. Traditionally, products such as this are purchased first by technology enthusiasts who understand that problems will be encountered, but are willing to work through them. More recently, partially due to web based review sites, more and more ‘mainstream’ users are buying into brand new technology, yet are not tolerant of the inevitable problems that will result. This causes major PR headaches for manufacturers, and can actually work against them. Intel hasn’t had to deal with this for quite some time, as they have not introduced anything truly new since 1995. With the Rambus DRAM controversy, Intel is now finding out how this affects everyone. Because of the early problem reports, many of these ‘mainstream’ users will most likely wait awhile, thereby possibly reducing the PR problems AMD might have encountered if the launch had gone smoothly.

However, if the inevitable compatibility and/or stability issues do cause a major PR problem, it may signal the end of AMD as we know it and Intel will once again reign as the sole provider of x86 processors, charging whatever they can. While Intel stockholders may be eagerly anticipating this, the vast majority of consumers and manufacturers are hoping it doesn’t turn out this way.

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