Can Advanced Micro Devices, Inc. Outflank Intel With This Low-Cost Platform?

AMD just launched a processor meant for easy upgrades at a low total system cost -- a market that Intel largely ignores.

Mar 6, 2014 at 4:26PM

Advanced Micro Devices (NASDAQ:AMD) missed the boat on the tablet and smartphone revolution. That fact is not up for debate. But the microprocessor designer may have found a new lease on life in traditional PC systems -- aimed at emerging markets.

AMD just announced a new platform that's shooting straight for that specific market. The AM1 platform gives a new home on the desktop to AMD's laptop chips, developed under the Kabini code name.


AMD is reaching out to developing markets with desktop-format Kabini chips. Image source: AMD.

AM1 promises to put Kabini's very capable all-in-one feature set in a socketed format, giving cost-conscious users both respectable power and a path to future upgrades. Laptop chips typically come soldered to the motherboard, leaving little room for low-cost partial system upgrades.

That's exactly the tune that AMD is singing about this new product. AM1 provides "a multitude of options for consumers and system builders looking for upgradeability packed into an extremely affordable solution," says AMD's client business VP Bernd Lienhard.

Shooting brand new products right into the low-cost market segment is not a new strategy for AMD. The company has a history of undercutting arch rival Intel (NASDAQ:INTC) in terms of raw pricing, as the larger company generally prefers to just let older products slide down and fill cost-sensitive market needs.

One crucial aspect of the AM1 launch is that AMD's hardware partners are expected to build motherboards with:

  • low cost, of course

  • established industry standards like micro-ATX formats

  • support for newer standards like USB 3.0 and SATA 6GB/s

Put these details together, and you should be able to pair your new system with a largely obsolete case and power supply, do it cheaply, and still get access to newer technologies. It's a shake-and-bake system with a huge flexibility factor.

Maybe that's what it takes to build market interest in emerging economies like the BRIC bloc, Latin America, and Africa. If so, then AMD is onto something with this AM1 launch.

Mind you, it's not a safe bet. AMD has been down the low-cost road before with some success, but the company still holds a minuscule market share next to gargantuan Intel -- in every segment that matters. Even if the AM1 low-cost strategy plays out as planned, the company stands on a brittle fundamental platform, and is only suitable for speculative investing.

In other words, don't back up the truck to load up on AMD, and only invest money you could afford to lose.

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Anders Bylund owns shares of Intel. The Motley Fool recommends and owns shares of Intel. Try any of our Foolish newsletter services free for 30 days.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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