AMD Attacks the Mobile Space

Right before its fourth-quarter report, chip designer Advanced Micro Devices (NYSE: AMD  ) launched an embedded version of its long-awaited Fusion architecture. Billed as a challenger to Intel (Nasdaq: INTC  ) Atom chips, and perhaps even mobile dominator ARM Holdings (Nasdaq: ARMH  ) solutions, does the eBrazos have what it takes to be a difference-maker?

AMD calls the embedded G-Series processor line "the world's first and only" integrated processor-plus-graphics solution. The raw processing power of a full-fledged x86 chip, combined with a modern graphics core and accelerated video-stream decoding, makes the new chips instant contenders for media centers and other set-top boxes.

Furthermore, the processors are designed to run on no more than nine to 18 watts of electric power, depending on the exact model -- not quite skimpy enough to qualify the chip for smartphone use, but potentially a great solution for media-centric tablets, and absolutely a candidate for most ultraportable notebooks.

Forgive me for flogging a deceased equine here, but wasn't this the exact market that ex-CEO Dirk Meyer got fired for ignoring? AMD's board obviously knew that these chips were coming down the turnpike in short order. Meyer may not exactly have focused on mobile computing, but AMD under his leadership was clearly making moves in that direction anyhow.

And that's quite beside the real point: Classical server and desktop chips tend to command wider profit margins, which is an important consideration for the very cost-sensitive business model AMD runs. Chasing big revenue numbers at the cost of lower profits doesn't seem like a sensible strategy for AMD, yet that's what the board wants.

Ahem.

The embedded Fusion chips come with a rather bland slate of launch partners; the biggest brands on deck are Fujitsu and Wyse. But Microsoft (Nasdaq: MSFT  ) already used AMD embedded chips to showcase its Surface multitouch computing platform. Intel's latest-and-greatest embedded offering wasn't deemed robust enough to handle that processing-intensive application, giving AMD a nice selling-point feather in its cap

I'd love to hear some new design wins for this new product line baked into tonight's earnings report, along with an attempt to clarify the CEO-booting mess. I'm currently a somewhat skeptical AMD shareholder, desperate for some tangible good news. eBrazos could be a piece of that puzzle, but AMD still needs to prove it.

Add AMD to your watchlist if you haven't already, then discuss the business implications of these embedded processors in the comments below.

Intel and Microsoft are Motley Fool Inside Value picks. The Fool owns shares of and has bought calls on Intel. Motley Fool Options has recommended buying calls on Intel. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Anders Bylund owns shares of AMD but holds no other position in any of the companies discussed here. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.


Read/Post Comments (1) | Recommend This Article (1)

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 January 25, 2011, at 1:33 AM, ibankingcrooks wrote:

    Yes. They have made a chip with out a home. Oh great, we win Fujitsu netbooks!

    I agree with the margins comments - the e-team needs to make a decision: either shelve the low-end, and kill Intel in the high-margin, lower volume server/gamer market. Or build a really great mobile chip, which really is cheap, and make it in solid margin at strong volumes. ...Oh wait, you sold Imageon. Oops.

    But alas, this executive can't make tough decisions. Just blame people they are firing.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1426154, ~/Articles/ArticleHandler.aspx, 12/19/2014 5:54:54 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement