Dell and AMD is just the beginning of cooperation, and perhaps not end.
"Dell AMD marriage of two things: First, do our business better, because Dell's accession to the user's acceptance of the AMD will be higher; Second, our profit thinner, because the Dell AMD together came in, prices will be held down. "Sun server channel business associate chairman of Beijing Dong-Hui Wang Rong commented. Wing of the Alliance Sun servers in China, one of seven channels, while the Sun is AMD's die-hard supporters, the server does not use Intel processors.
May 18, Dell released the company earnings call made it clear that Dell will be in its high-end four-way servers using AMD's Opteron processors, expected to launch new products later this year. Although the marriage between Dell and AMD's "scandal" has been seething mass of more than a year, but the news was confirmed, the industry is still a shock.
22 years, Dell has been a fan of Intel. Even rival IBM, HP products have on the server using AMD Opteron processors, Dell is still unmoved. The Dell has finally turned to AMD, its underlying causes and impacts of all food for thought.
Dell and AMD after all, marriage is ultimately a "God" in the hands fiddle. "God" is the user's needs.
"For users, not to mention like AMD, Intel does not like. Merely provides an alternative AMD, Dell can not give up this part of the user." CCW Research senior analyst Guo said.
Some analysts believe that, AMD Opteron processors, both in performance on, or power consumption, are better than the Intel Xeon processor, and AMD has a price advantage. On is known as "price butcher's knife," said Dell, the AMD "inexpensive" products shut out, does not seem wise.
According to the latest Dell filing shows the first quarter 2006 sales of 14.2 billion, compared with the previous quarter fell 6%, but up 6% over last year; first quarter profit 762 million U.S. dollars, down 25% QoQ , down 18% from a year earlier. Dell CEO Kevin Rollins said: "The intensity of competition in the market beyond our expectations." Analysts believe that Dell is facing declining performance of the board, shareholder pressure, Dell alliance at this time, AMD, is under pressure to choose.
Steve Felice, president Dell Asia-Pacific in the interview with this reporter, said that Dell's business development is very important, is to hear directly from customer feedback, if the customer needs, must find ways to meet. Current customers in high-end servers on AMD's products are very high demand, this is Dell's high-end servers to use AMD chips.
Dell made the decision quite cautious. Some analysts believe that Dell's sales of AMD products, the need for additional design and construction of additional production lines, may give the company more complexity and higher costs. In accordance with the established practice of Dell, Dell certainly has done the exact calculation of inputs and outputs only after such a major decision to make.
In Greater China, Sun senior director Lin Wenxi view, Dell alliance AMD, AMD's product description has come to harvest. "If Dell to enter the field which shows that the field is mature."
Dawn's server product manager, said Shen Yang, now the dawn of the server using Intel processors and AMD processors, the ratio of about 5:5. Choice of a server, users have the final say.
In China in the server vendors, the wave is yet to cooperate with AMD server manufacturers. When asked whether cooperation with AMD, the wave of the server's public relations officer, said: "does not exclude such a possibility."
AMD really win?
Dell is for AMD, of great significance. Dell is not only one of the world's three major server vendor, or the world's largest PC maker, Dell took over the castle, is a major victory for AMD, but its future long way to go.
Dell announced the alliance at AMD, the Nasdaq Stock Exchange when the regular trading week Friday, AMD shares rose 3.6 U.S. dollars, or 11%, to close at 34.95 U.S. dollars; Intel shares fell 29 cents, down 1.5%, to close at 18.36 U.S. dollars.
In a statement released by AMD, AMD director of global commercial market, said Marty Seyer, senior vice president: "We welcome Dell, and users to join the AMD camp!"
But analysts say high-end server products only a small fraction of Dell's total sales, Stifel Nicolaus analyst Cody A Kerui (Cody Acree) in the research report pointed out that multi-core server market, Dell is lagging far behind the major competitors HP and IBM, ranked third. According to Citigroup analyst Glen Yeung estimates that high-end Dell server sales accounted for all server products revenue of 5%. Dell reported last quarter, server and network products revenue of 13 billion U.S. dollars, accounting for 9% of the company's sales. Yeung said the analyst, can be deduced, Dell only change the CPU of some products provider, on AMD and Intel, the financial impact will be very limited.
Dell's Asia Pacific president acknowledged that most of Dell's server products continue to use Intel chips. Before the transfer for the AMD-based servers Dell servers will account for 10% -20%, AMD side noncommittal.
Dell to adopt AMD processors, greater significance is that the AMD processors into the Dell desktop and notebook computer products possible. Analysis that breaks in the past, AMD model of cooperation with other enterprises is generally from the server to the desktop and notebook PCs, Dell and AMD's cooperation may also be the case.
President of Dell Asia-Pacific response to the question on this very "official": "does not exclude such a possibility. If we cooperate in the PC, will tell the media."
To be launched at the end of the year-end servers based on AMD processors will launch in China, AMD's public relations staff did not give comment. Dao Shi, President Asia Pacific, said Dell, AMD's growth in the Asia Pacific than in the United States faster than the large U.S. market share. AMD in the Asia Pacific customer acceptance is higher than other markets, which Dell introduced in the Asia-Pacific AMD's products are very useful.
In addition to other Dell, AMD is still continuing with the other battle, such as working with the wave of positive engagement. One commented that the industry, AMD negotiations with OEM manufacturers, OEM companies are qualified to say the conditions, but AMD is still not qualified to talk conditions. CCW Research analyst Guo Chang said: "AMD can only win a battle, not a battle."
Intel will change
According to the Associated Press reported that the recent decision for Dell, Intel CEO Paul Otellini said in an internal memo was disappointed. He said: "This is an incredible, extremely disappointing decision."
Significantly, Dell announced a few days before using AMD chips, Intel China has replaced senior management. Former co-general manager of Intel China, Lai Yit Loong will officially leave on June 10 Intel, another co-general manager Jane Angel will be transferred back to U.S. headquarters. Intel vice president and general manager of Asia Pacific Yang regain the helm of Intel China. Some analysts believe that for the Chinese market is more familiar with Yang and return to China shows that China's domestic market, Intel hopes to "check" aggressive AMD.
Analyst who is familiar with Intel, said Intel's general manager before the "foreigners" as limited communication with local enterprises. Although they work very hard, but they are still difficult to integrate into the circle in a short time.
May 16, Yang re-appointed at the beginning, it appeared a Lenovo notebook computer conference, which is considered Yang desire to improve relations with downstream manufacturers of a hint. The two previous co-general manager of Intel ruled that, despite the many efforts, such as GAPP program to support regional brand, but AMD's momentum can not stop. Last year, Intel's other main coalition party also backward with AMD, so Intel had to re-examine the relationship with the OEM manufacturers.
In the past few years, the cooperation with the downstream business, Intel is undoubtedly the absolute master, and Intel used to be good for a deal with the various vendors. It can be said for Intel's strong position, OEM manufacturers do not have much say in public. AMD's rise, with some changes to this situation. To a certain extent, AMD and Intel have become public companies bargaining chips.
Dell and AMD is just the beginning of cooperation, and perhaps not end.
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