Shares of AMD (NASDAQ:AMD) have surged nearly 60% this year, fueled by reports that its Ryzen CPUs were gaining ground against Intel (NASDAQ:INTC) in desktops and data centers. Between the fourth quarters of 2016 and 2017, AMD's market share in CPUs rose from 9.9% to 12%, according to Mercury Research. Intel then-CEO Brian Krzanich also recently admitted that his goal was merely to prevent AMD from claiming 15% to 20% of the data center market -- a market in which Intel currently holds a near-monopoly.

Things look rosy for AMD, but the notebook market remains a tough one. Susquehanna analyst Christopher Roland recently stated that AMD's market share in desktop CPUs had reached 15.2% for the second quarter, but that its notebook CPUs hit a "new low" of 3.2% -- and that Ryzen Mobile remained "a no-show" with a share of just 0.5%.

A gamer uses a laptop.

Image source: Getty Images.

That news is disappointing, since Ryzen Mobile, AMD's APU that marries its Ryzen CPU with a Radeon Vega GPU on a single die, was aimed at making a big splash in notebook gaming. So why have OEMs been so reluctant to launch Ryzen Mobile laptops? Let's take a look at the four key reasons.

1. Kaby Lake G

Last year, AMD announced a rare partnership with Intel to launch Kaby Lake G, a combo chipset that connected an eighth-generation quad-core Intel CPU with AMD's custom Radeon RX Vega M GPU. This wasn't an APU -- which puts the CPU and GPU on the same die -- but rather a CPU and GPU on separate dies linked via PCI-E.

AMD likely forged that alliance with Intel to counter NVIDIA (NASDAQ:NVDA), which was aggressively expanding into notebooks with its M, MX, and GTX-series GPUs. However, Kaby Lake G's arrival also confused many consumers, who erroneously thought it was an APU that merged an Intel CPU with an AMD GPU. That launch arguably overshadowed Ryzen Mobile's arrival.

2. OEMs still prefer Intel and NVIDIA

Intel and NVIDIA have "best in breed" reputations and leading market shares in CPUs and discrete GPUs, respectively. As a result, many OEMs continue launching business-class notebooks with integrated Intel graphics, or gaming-class notebooks with discrete NVIDIA GPUs -- instead of new AMD-powered devices.

NVIDIA's GPP (GeForce Partner Program), which grants OEMs early access to new chips and engineering collaborations, also likely locks in manufacturers.

An NVIDIA-powered Acer Ultrabook.

Image source: NVIDIA.

3. You can't build your own laptop

In the desktop market, AMD can sell its Ryzen CPUs to OEMs, computer shops that assemble PCs, or build-it-yourself consumers. Computer shops and consumers aren't beholden to long-term partnerships with Intel and NVIDIA, so they can freely install AMD chips in desktops. But consumers also can't build their own laptops -- which leaves AMD at the mercy of stubborn OEMs.

4. Gaming laptops remain niche devices

Ryzen Mobile-powered laptops are about $50 to $100 cheaper than their Intel/NVIDIA-powered counterparts, depending on the configuration. However, gaming laptops still cost much more than business ones, and they only target a niche market of gamers -- and those customers probably don't mind paying a little extra for a "best in breed" gaming experience.

The rest of the notebook market is still heavily focused on business or education users. For example, the best-selling laptop on Amazon is Acer's E 15, a $380 device that sports a low-end Intel i3 CPU with integrated Intel graphics. Meanwhile, many casual gamers likely prefer to play games on smartphones or tablets instead.

A long uphill battle

AMD has made remarkable progress over the past year, but loosening Intel and NVIDIA's grip on the notebook market won't be easy. Pre-existing partnerships and lackluster demand for AMD-powered gaming notebooks could prevent Ryzen Mobile from gaining much ground for the foreseeable future.

 

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Leo Sun owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon and Nvidia. The Motley Fool has a disclosure policy.