AMD, after losing its sheen during the past few years, is now trying to hit back at competition by targeting emerging markets like India. But will that alone suffice for an ailing chipmaker? B&E chats up with AMD top managers in US and India. by Steven Philip Warner, Amir Moin & Hsotuhsa Alobrah
The company has taken some steps of late, to improve its overall situation in the face of fierce competition. Marty Seyer, Chief Strategy Officer of AMD tells B&E, “We’ve taken steps to streamline the company including revitalising the executive team and board with a series of strategic appointments, reducing company debt, refocusing on design and the spinoff of AMD’s manufacturing capabilities in 2009,” but that clearly isn’t enough. Says Seyer, “The key to success won’t be based on past achievements, but rather on forward-looking innovations. AMD’s success occurs when we blaze new trails for technology. The semiconductor market has always been, and always will be fiercely competitive.” AMD should therefore fall back to carving a niche in emerging categories, one of which is mobile devices, where Intel’s Atom and Qualcomm’s Snapdragon scores well over it. In 2003, when it launched the Athlon processor, Intel offered the Pentium 4 and Celeron chips (P4 was a high price-high performance offering, while Celeron fell in the low band on both parameters). This left a gap in the price-performance equation and that’s where AMD’s Athlon found a market, offering the right price for a right level of performance. It was such a hit that every eighth desktop processor sold in India during 2003 bore an Athlon stamp. AMD needs a similar trick today.
The opportunity lies in the mobile devices category, which is gaining ground by the day. It’s the new age, and simply betting on India’s villages will only prove a survival act. It’s far from single-handedly becoming the long-term growth remedy for the Sunnyvale chipmaker. Innovate or die. Period.
Steven Philip Warner, Amir Moin & Hsotuhsa Alobrah
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Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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