The Key to AMD's Mullins Are Design Wins

For the last several years, Advanced Micro Devices (NYSE: AMD  ) has released product after product targeted at some sub-niche of the Windows tablet market. Hondo, its first swing at bat, was too power hungry and offered poor performance. Its next attempt, Temash, was appreciably better but still missed the mark and failed to gain traction. Its most recent effort, Mullins, is next up at bat. Can AMD deliver a home-run here?

Two big unknowns: Power consumption and platform cost
From the benchmarking that AMD allowed the tech press to do on its 11.6-inch "Discovery Tablet" reference design, the performance -- both graphics and CPU -- of the platform was quite good. However, for mobile devices, "performance" is a meaningless metric unless accompanied with "power consumption" and "bill of materials cost."

Intel (NASDAQ: INTC  ) , for example, was able to deliver with its Bay Trail product, a part that offered good performance and power, but the platform that surrounded the system-on-chip was simply too costly relative to competing products from Qualcomm (NASDAQ: QCOM  ) and MediaTek. Intel has leveraged its financial might to try to gain share with this product by offsetting this bill of materials deficiency, but it is costing Intel's shareholders a pretty penny.

Given that Mullins is based on the same silicon as the notebook-oriented Beema, it is unlikely that Mullins' platform bill of materials is optimized for lower-cost tablets. However, if the performance and power are there, then it could still find a happy home in larger-screen convertible/detachable devices. AMD is not likely willing to provide contra-revenue support in order to establish market share (and the strategic importance of tablet traction to AMD is far less than that importance to Intel).

Keep a close eye out for design wins
With that all said, the big Computex trade show in Taipei, Taiwan, is set for early June. It is at this event that we could see OEMs announcing new notebook and tablet designs for the back-to-school shopping season. The design win momentum that AMD is able to exhibit with Beema (for low-cost notebooks) and Mullins (for Windows 8.1 tablets) will be critical in determining just how competitive on performance/power/cost AMD's new low-power parts really are.

If AMD's partners show a slew of impressive design wins with Mullins, then this gives hope for AMD's strategy in PCs and tablets long term. The share-loss story has so far been a drag on the company's computing solutions segment and if it can show signs of a meaningful, long-term reversal there against rival Intel, then the stock could be trading at much higher levels than it does today.

Foolish bottom line
Admittedly, I'm not hugely bullish on AMD's tablet or PC parts and don't think the company will really bring the fight to Intel until the 2016 time frame. That being said, if AMD has really executed here and if there is true substance to the company's performance/power claims, then perhaps it will be time to reevaluate those assumptions.

However, given AMD's past disappointments in this space (and Intel's clean sweep of Windows 8.1 tablets and increased penetration in low-end Windows 8.1 notebooks), healthy skepticism is warranted and we should wait to see just what designs AMD has won with Mullins.

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  • Report this Comment On May 14, 2014, at 12:25 PM, H2323 wrote:

    AMD is using Mullins as a showcase. Any win in tablets is generally useless to them because they are currently tied to windows tablet with x86,(very low volume free slow baytrails)

    AMD was able to showcase their graphics vs Adreno/Powervr, beating baytrail is kind of a given since even mediatek's latest SoC's are faster. The real prize is android for tablets, The future ARM designs for unconnected tablets should be good.

  • Report this Comment On May 14, 2014, at 3:03 PM, keeperoftheq wrote:

    The CEO told us to expect some more design wins before the back to school sales. Samung and Lenovo are already shipping units using these.

  • Report this Comment On May 14, 2014, at 4:24 PM, ta152h wrote:

    I'm with you in agreeing that in the tablet space, we need to see REAL results from independent tests before we can determine which range of tablets these parts can fit in.

    Clearly, they'll be fine in 4 Watts+, but less than that is where we need the clarification.

    I think with Intel's push, and the fact Bay Trail/Cherry Trail is a phone processor moving up, whereas Jaguar/Puma is moving down to tablets, any market share for AMD will be limited in tablets. Also considering Windows 8.1 isn't really a big factor in tablets at this time, I think it's reasonable to expect some improvement (since the product is, even minimally, significantly improved), I don't see tablets as a 'game-changer' for AMD with the current products they have.

    I think they are looking at ARM for that. But, I do think Puma will gain in notebooks, and I think Jaguar/Puma will be very successful in desktops. Well, for AMD. I'm not expecting 80% market share, but I'd be happy with a bump of a few percent. More than that isn't reasonable at this point.

  • Report this Comment On May 14, 2014, at 4:46 PM, TMFAeassa wrote:

    ta152h

    Agreed.

  • Report this Comment On May 14, 2014, at 4:48 PM, TMFAeassa wrote:

    To clarify I am agreeing with:

    "I'm with you in agreeing that in the tablet space, we need to see REAL results from independent tests before we can determine which range of tablets these parts can fit in."

    Still not convinced that BYT-M won't keep taking share from AMD, but as always time will tell.

  • Report this Comment On May 14, 2014, at 7:59 PM, rav55 wrote:

    @Ashraf

    "However, given AMD's past disappointments in this space (and Intel's clean sweep of Windows 8.1 tablets and increased penetration in low-end Windows 8.1 notebooks), healthy skepticism is warranted and we should wait to see just what designs AMD has won with Mullins."

    Intel achieved this "clean sweep of windows tablets" becasue they gave massive rebates to make them competitive. These rebates have resulted in to date $ over $5 BILLION in losses for the Intel Communication and Mobile group.

    That sweep is hardly a coup but rather is responsible for a massive loss in shareholder value, the reason why Warren Buffett dumped Intel stock and why Intel is one of the top 10 shorted stocks on the NASDAQ.

    "Intel is losing billions every year on tablets and smartphones

    In 2013, Intel's mobile chip division lost a hefty $3.15 billion, after posting an operating loss of $1.78 billion in 2012. In the first quarter of 2014 alone, the Mobile and Communications Group saw a $929 million operating loss on a meager $156 million in revenue, according to new financial results issued today by the company."

    http://www.theverge.com/2014/4/15/5618126/intel-is-losing-bi...

    This Intel is on track to lose almost $4 BILLION dumping tablet and smart phone silicon.

    If Intel shut down the Tablet and Mobile division last year then they would have reported $0.50 per share this last quarter rather then $0.38 per share and Intel stock would be approachng $40 per share.

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