AMD Loses a Key Samsung Design

When Samsung (NASDAQOTH: SSNLF  ) held an event late last year at which it launched a flurry of new products, among those products was a pair of laptops. The first was known as the ATIV Book 9 Plus, which was a high-end Ultrabook with an Intel (NASDAQ: INTC  ) Haswell processor. The second was its cheaper sibling, known as the ATIV Book 9 Lite. This one was powered by an Advanced Micro Devices (NYSE: AMD  ) Kabini APU.

Samsung gives AMD the boot; Intel wins again
In an unfortunate turn of events for AMD's notebook-processor strategy, Samsung just updated its ATIV Book 9 Lite with a "Y" series Haswell part from Intel, booting AMD's Kabini right on out. For those of you unfamiliar with Intel's slightly zany naming scheme, the "Y" series of processors from Intel are the company's convertible/tablet-oriented low-power variants of its high-end Ultrabook processors.

(Source: Digital Trends)

While some AMD investors may claim that Intel is "buying" this socket back, the fact of the matter is that in devices such as the MacBook Air and other Windows 8.1 laptops, Intel's Haswell products have been exceptionally well-reviewed and praised for their high speed and low power consumption. However, AMD's Kabini product -- as much as AMD tried to tout it as revolutionary -- led Engadget to say this about Samsung's ATIV Book 9 Lite:

But why should you even care who makes the CPU? Because the performance here is absolutely dismal, that's why. Not only does the Book 9 Lite trail its competitors in benchmarks, but it's also sluggish in day-to-day use. Many times, we noticed a kind of ghosting effect as we dragged around windows and opened new files and applications. Other times, programs became unresponsive. The bottom line: It's a little too easy to overwhelm this machine.

Samsung likely went with AMD since AMD probably offered Samsung a really good deal on the chips -- and Samsung and Intel are increasingly becoming enemies. Unfortunately, this is a situation where going with a sub-par processor likely cost Samsung sales, as the reviews clearly indicated that it was a poor performer. On top of that, it doesn't help that Samsung's PC competitors were all using Intel's superior Haswell products. AMD's Kabini is likely well-suited as a competitor to Intel's Bay Trail-M in sub $500 PCs, but it had absolutely no place in a $650-plus premium machine from Samsung.

Foolish bottom line
While some AMD bulls seem to believe that the pricing premium that Intel charges on its parts is unjustified, the proof is in the pudding. In highly competitive markets like PCs, there's no room for products that offer worse performance and battery life than the competition. With the competition all flocking to Intel's Haswell, and with the ATIV Book 9 Lite garnering significant criticism for its poor performance, it was the right business decision for Samsung to update this machine with Intel inside.

This win for Intel isn't what makes AMD's position so tough, but it is reflective of a broader problem for AMD: Its products simply aren't competitive, and the company's financial situation isn't comfortable enough to allow for too many more mistakes -- or for increased investment to overcome these problems. AMD better deliver with its next-generation Beema SoC and with its higher-end Kaveri in notebooks, or the market-share losses to Intel will continue. In a PC market that's declining, that would be doubly bad for AMD.

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Read/Post Comments (19) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 11, 2014, at 1:19 PM, KenLuskin wrote:

    Its nice to know that FOOLS can count on the author to continually focus on MEANINGLESS stuff!!

    This is MEANINGLESS to AMD, and Intel, when put into perspective.

    Samsung went with a lower cost option that did NOT sell well.. so when AMD loses that slot, it is MEANINGLESS to AMD!!!

    The FUTURE is about GRAPHICS, not more powerful CPUs!

    WHY have 32 bit Tablets REPLACING much more powerful 64 bit Laptops???

    Obviously, MOST people do NOT think they need to "Intel inside" anymore!!

    The success of significantly LESS powerful CPUs in Tablets does NOT co-exist with the Intel model!!

    WHY does Intel have to BRIBE OEMs to use their crappy Baytrail in Tablets= crappy GRAPHIC ???

    If the FUTURE is TABLETS, then Intel is in DEEP DOO DOO!

    People want LOWER priced devices which is a disaster for Intel!

  • Report this Comment On February 11, 2014, at 1:24 PM, longtbt wrote:

    The alternative headline:

    XBox, Playstation and Nintendo give Intel the boot; AMD wins again.....

    Intel loses a key Playstation, Xbox, Nintendo design.....

    blah, blah, blah......

    lol

  • Report this Comment On February 11, 2014, at 1:29 PM, keeperoftheq wrote:

    What is your point Ashraf? Models come and go. Why is it you always point out any loss for AMD but never any gains. Because you continue to be pumping Intel and bashing AMD. Nothing even close to a balanced review. Shame on Motley Fool for keeping you on as a writer.

  • Report this Comment On February 11, 2014, at 1:57 PM, bugsy1339 wrote:

    Ashraf give an unbalanced opinion on AMD - thats a given - hey i hear Intel is going into the custom chip business too - so they offer you an atom or haswell - take it or leave it lol

    wonder if he might comment soon about how AMD is starting to eat Nvidia's lunch in the pro graphics business

  • Report this Comment On February 11, 2014, at 2:22 PM, typecheck wrote:

    What is so surprising that AMD 's Kabini APU is not up to task in the laptop market.

    Recent decline of AMD chips in mobile computing market is continuing its trend. ATIV design win is almost a miracle to start with and then it is gone just like that.

    The good news is that Kaveri mobile version will have better performance compared to Kabini and I hope Beema will be similar. Still, time is running out for APU to succeed.

    AMD is gradually relying on more and more on its graphics department and may eventually become a graphics company with a small CPU division.

    Ashrah, you are blowing this all out of proportion. Really. The lost of this socket does very little to AMD's bottom line, if any at all.

  • Report this Comment On February 11, 2014, at 2:26 PM, cyseller wrote:

    Where is your article on the new Lenovo IdeaPad Flex notebooks sporting AMD processors on the inside rather than $INTC chips?

    :)

  • Report this Comment On February 11, 2014, at 2:41 PM, wownwow wrote:

    "AMD Loses a Key Samsung Design"

    Why not "AMD Loses many Designs" ?

    Just keep in mind, for every $100M AMD makes, Intel needs to make more than $4.2B :) See the picture from an investment point of view? Very likely you aren't able to.

  • Report this Comment On February 11, 2014, at 2:42 PM, MAP1288 wrote:

    LMAO....it amazes me they alow these clowns to write for them. Th MF is literally worthless given the quality of their writers......seriously, people in the know, if they even take the time to read these articles anymore, just laugh at this. It would be the equivilent of an article stating that Tiger Woods lost his golf bag sponsor, and will have to change brands for his GOLF BAG....seriously.....this guy (and ultimately it reflects on the MF in general) has very little education and ability....the MF can't find writers worth anything that will work for the less than $30K they get paid.....what a joke.

  • Report this Comment On February 11, 2014, at 4:24 PM, x000ald000x wrote:

    As long as AMD is cash-flow positive, bankruptcy is averted and the shorts are stalled. They will have to cover eventually--even if Samsung takes away a socket and the various bears bellow.

    AMD still has issues, but the high short interest tells me that the worst case may already be priced in. $3B market cap for AMD is absurdly low in a ZIRP environment.

    Worst case: AMD struggles and stays in the $3-$4 trading range. Best case: to the moon Alice, to the moon.

    If you wait for all the news on AMD to be good--and all the pundits bullish--you will miss the really big % gains.

  • Report this Comment On February 11, 2014, at 5:33 PM, TEBuddy wrote:

    Thats likely because Intel made them an offer they couldn't refuse, making their choices even cheaper. Intel probably took a big cut in their margins.

    The review sites are also biased, likely on the Intel payroll. Its amazing that this biased author keeps taking miniscule information to write his Intel is the winner articles. Its really pathetic, and seeing him in video just showed how worthless he is as a real analyst.

  • Report this Comment On February 11, 2014, at 6:43 PM, rav55 wrote:

    Hey Ashraf, your hyperbole is showing AGAIN. So AMD losses a cheap folding tablet design win? The ATIV Book 9 is a folding windows tablet with a built-in keyboard. It’s completely ridiculous with ANY silicon. The problem with Windows Tablets is not the cpu’s, it’s Windows.

    Intel got booted from the consoles. Did you announce that disaster in ANY of your Intel pieces?

    And it was a disaster make no mistake about it, there is now AMD Inside millions of new living rooms being played by millions of young new computer gaming geeks who will start to ask themselves when they control their discretionary income why should I buy Intel when AMD graphics rock? And Intel graphics just don’t suck enough.

    Apple threw out nVidia for Radeon but did you announce that negatively in ANY nVidia piece?

    Ashraf s you so well know, you can’t win all of them. The design loss was not even close to being “key”.

  • Report this Comment On February 12, 2014, at 4:37 AM, tely1 wrote:

    Lenovo is refreshing its line of IdeaPad Flex notebooks with the new Flex 14D and 15D laptops, which sport AMD processors on the inside rather than Intel’s chips. Starting at $499, the 14D and 15D Flex feature nearly the same design as Lenovo’s previous IdeaPad model and are set to debut in Q1 2014.

    Sounds like somebody is an Intel fanboy.

  • Report this Comment On February 12, 2014, at 4:41 AM, tely1 wrote:

    MSI's GX Destroyer Series possesses the perfect combination of multimedia capability and gaming performance. Armed with AMD's state-of-the-art mobile processor, both GX70 and GX60 Destroyers come with AMD's latest GPU and its proprietary Mantle Graphics technology, which improves gaming performance, ensures higher resolutions and smoother gameplay and allows developers to utilize the GPU more efficiently to create a more immersive gaming experience.

    No wins here for AMD?

  • Report this Comment On February 12, 2014, at 4:45 AM, tely1 wrote:

    PC system builder Maingear has just announced its first foray into the fledgling Steambox market. The company's newest gaming PC, the Spark, weighs less than a pound and measures just 4.5 inches wide, 4.23 inches deep, and 2.34 inches high. Like all Steamboxes, the Spark will run Valve's Linux-based Steam OS.

    Valve hopes to challenge the Xbox One and PS4, as well as traditional Windows gaming rigs, by offering a middle ground between DIY gaming PCs and traditional consoles.

    Essentially, Steamboxes are dedicated machines meant to run PC gaming titles purchased or activated on the Steam gaming platform. Manufacturers are partnering with Valve, the company behind Steam, to build console-style machines for PC games. Valve hopes to challenge the Xbox One and PS4, as well as traditional Windows gaming rigs, by offering a middle ground between DIY gaming PCs and traditional consoles.

    Specs for this tiny PC include a quad-core AMD A8-5575M processor clocked at 3.1GHz, an AMD Radeon R9 M275X video card, up to 16GB of RAM, and support for up to 356GB of solid-state storage and a separate SATA III slot for an additional hard drive. The Spark has four USB 3.0 ports, a headphone jack, an HDMI port, a Mini DisplayPort, and an ethernet (RJ45) jack.

    The Maingear Spark will be available in mid-to-late Q1 2014. Pricing information has not been released just yet.

  • Report this Comment On February 12, 2014, at 4:53 AM, tely1 wrote:

    Wow.

    This is a prototype Steam Machines box from iBuyPower, courtesy of our friends at Engadget. The box comes in two flavors (codenamed "Gordon" and "Freeman," of course), as the center strip is either clear or black when not illuminated with varying colors.

    Much glow.

    While iBuyPower wasn't willing to share the specs of its version of the Steam-powered hardware, it said the system will run Steam games at 60 frames per second in 1080p. The system is expected to be ready for a 2014 launch, and the two prototype models currently run an early build of SteamOS, the operating system Valve announced would be on its own Steam Machines hardware. Both were announced alongside a Steam Controller in September.

    Very Steam Box.

    Much update: The Verge reports that the system will include a "multicore AMD CPU and a discrete AMD Radeon R9 270 graphics card" and comes with a 500 GB hard drive, bluetooth and Wi-Fi capabilities. That CPU is very core.

  • Report this Comment On February 12, 2014, at 7:57 AM, kjurden wrote:

    Hey ASSRAF...looks like everyone has your number! How does it feel to be the least believable writer in the investment community?

    Even if you were to change your tune now...no one will ever believe anything you say. You could try changing your contributer name...but we'll be able to spot your writting style a mile away!

    GO FIND A REAL JOB!

  • Report this Comment On February 12, 2014, at 8:05 AM, sandisanmina wrote:

    I could be mistaken but isn't this author often on Alpha touting AMD?

  • Report this Comment On February 12, 2014, at 10:37 AM, kjurden wrote:

    @sandisanmina...no, Ashraf is a INTC/NVDA fanboy/cronie and consitently writes negative articles about AMD. This guy has little if any experience in the stock market so his credibility is ZERO.

    @ashraff...

    http://www.forbes.com/sites/jasonevangelho/2014/02/10/amd-in...

    http://www.marketwatch.com/story/amd-radeon-r9-290x-named-pr...

    Now what do you have to say?

  • Report this Comment On February 12, 2014, at 1:06 PM, Beerfloat wrote:

    Yeah, AMD's neither fish nor flesh APUs continue to disappoint. The Samsung reversal is pretty bad, as is Haswell and Kepler's dominance in the portable PC area in general.

    But the real elephant in the room is of course the tablet and phone situation. Intel's struggles in that area are well documented but they're nothing compared to AMD's complete failure to gain any traction.

    The fanboys are out in force as usual but the short interest tells you all you need to know. This stock isn't taking off any time soon.

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