Opinion: What Does AMD's New CEO Need to Fix?

[buzznut]

What they need to address is how many customers they are losing to Intel because they can't compete in the desktop arena and they can not seem to bring the products they promise to market. They need to address how long time AMD users are abandoning them in droves because they can't seem to get their shit together. I don't know about R&D, but they need a new marketing dept. to figure out why the hell they don't give a crap about loyal customers who keep them in business. And they need to pull their collective heads out of their asses if they are too ignorant to realize that long time customers are tired of the lies and bullshit!

I disagree, they do need to make some radical changes if they hope to keep even the most diehard AMD fans, because we are tired of making excuses for them and waiting for products that never seem to arrive.

 

[legacy7955]

The bottom line is that for 99% of users most AMD chips are competitive with Intel products, now all AMD has to do is get those top tier chips to market and show intel up.

AMD DOES NEED TO MARKET THEMSELVES PERCEPTION IS A LARGE COMPONENT OF REALITY WITH MANY PEOPLE BUT PROBABLY NOT MOST FOLKS ON THIS BOARD WE'RE TO SMART TO BE SNOWED BY MARKETING ! LOL

I agree with another poster on the first comment page that got the impression that intel is the sneaky, greedy, con, that just uses arrogance, perception, and presence to control the game.

 

[beenthere]

Enthusiasts are a very small segment of the PC market. AMD has treated us well even if not the way some folks think it should be. If it wasn't for AMD we'd all still be using Pentium 90 CPUs costing $1000 a pop. Maybe you're too young to know or remember these?

If you feel your money is better spent on products from a company that has been convicted over and over and over for violation of anti-trust laws in their effort to crush AMD, then buy Intel's products. If you want to support a company that has been convicted numerous times of U.S. tax fraud while you have to pay your income taxes, then buy Intel products. Consumers are free to vote with their wallet. I vote for AMD and would never buy an Intel product ever again under any circumstances based on their unscrupulous and incomprehensible business tactics and violations of law.

There is no need to make excuses for AMD. they sell excellent products. They simply deliver the best performance/value in the PC Biz. If you need the latest bleeding edge over-priced CPUs then this week it's Intel's CPUs. Next month or next year AMD will still be offering the best performance/value but they may also have the fastest CPUs? They certainly have the best APUs as Intel has none. This is why AMD is gaining rapid laptop sales volume. They can't produce Llano fast enough and Trinity will be even better. AMD is thinking outside the box and has laid the ground work for a new X86 landscape that many consumers are going to be very happy with.

 

[lucky015]

[citation][nom]beenthere[/nom]What many enthusiasts do not understand is business... Advertising is great but 95% of consumers don't know or care what brand of CPU is in a store bought PC. All they care about is price and perceived value. AMD knows this and that is why they sold 12 million Llano APUs in a few months - FAR more than they expected. The way they achieved this excellent sales volume was because they got 150 new wins from VENDORS who build PCs for the consumer market. They showed the VENDORS what was coming with Llano laptop APUs, supported their development of the Llano platform and then when they started shipping Llano the VENDORS were all geared up and shipped these out to customers looking for a great user experience for a low price. AMD didn't even advertise Llano because the VENDORS are the ones who deliver to the mass markets.Intel can afford to piss away hundreds of millions on TV ads and buy server sales and ultrabook sales with bribe money. AMD can't compete on ad or marketing dollars so they instead deliver what customers want. In the server market that is low power consumption, long term platform stability/upgrade options and good performance. Welcome to Opteron 6200/4200!So Llano is a hit, Bulldozer based Opteron 6200's/4200's are selling faster than AMD can produce them with Cray and other super computer folks using them to upgrade existing computers and in new builds. Cray supposedly got the first 10,000 AMD Bulldozer based Opterons and is waiting for more. Next when AMD releases Zambezi they won't be able to produce them fast enough to meet demand. All of this is good news for consumers and a watershed moment for AMD. Once the Zambezi and other Bulldozer iteration pipeline is open AMD will be shipping Bulldozer based CPUs as fast as they can produce them.Read's job will be to manage this sudden sales/production growth, expedite production of the next several waves of Bulldozer upgrades, define product for 2015 and beyond, refine the ramp of new product so it is on time or early, continue to build VENDOR relations now that Intel has been convicted of bribery, blackmail, and other illegal strongarm tactics and advance the APU advantage that AMD has over Intel in all market segments. AMD has existed for more than 35 years by providing what consumers want at a fair price. They don't need to be bigger than Intel or have more sales to deliver the best value/performance proposition. They need to evolve not make radical changes.[/citation]
I'd say your correct on most of that, With one large exception, AMD could take on Intel in the advertising department fairly easily, They simply chose not to.

The reasons they don't would be closely related to the possible benefits, For example, Whats the best case scenario? They end up with a more successful campaign which costs them in the end more than they make from it because its direct to customers which actually makes up a smaller part of the sales, Then they are also expected to start releasing the "Fastest" chips which is another thing they *could* do if they wanted to, But they would be incomplete as Intel have learnt on occasion, This also decreases profits, Then would become obliged to increase their release schedule which once again would decrease profits, etc and that's only assuming they "Win" in a 2 horse race.

If they where to come in second place (Lose) or even to just exchange blows with intel at a faster pace (Closer to what their graphics card division does with nVIDIA) they still wouldn't be any better off than they are now.

If they start with a middle of the ranging advertising campaign that would risk scaring off their major partners, If they start with a Major campaign it would likely lose money, What they have done by pulling in ATI even closer was probably the best thing they could do, Pull in the publicity ATI does get into the main brand while not needing to do anything extra.

 

[eddieroolz]

AMD needs more exposure. They need to correct the misperception that Intel fed to the general public about AMD processors. I've mentioned multiple times in the past about the image of AMD with the clueless public, and it isn't exactly positive at all.

Maybe a start can be airing advertisements on television, and emphasizing the technological superiority of AMD design with a catchy tune (just like Intel's ads). Then AMD can move towards holding an "AMD Day" of some sorts at retailers like Best Buy and Future Shop - just like I've seen Intel do.

Those are just two steps, but I think improving the brand image will lead to more sales.

 

[beenthere]

How many people have you ever seen go into a Bad Buy or other PC Big Box store and say "I want an Intel powered PC"? Zero is the correct answer. Mass market consumers buy solutions that make them happy. First consideration is price range, then functionality. If they find what they think will make them happy they don't ask if has an AMD or Intel or Motorola or VIA CPU, they just buy what makes them happy.

Enthusiasts are the few who care about CPU brand/performance and they are a very small segment of the PC market. That is why AMD doesn't waste a lot of money on TV advertising. As their sales grow they will likely use TV to promote their APUs because they have a two year development advantage over Intel. The more successful AMD's sales are the more marketing funds they will have available to use as best they can but trying to compete on advertising is a foolish strategy for a smaller company like AMD. They have gained a lot of industry wins by simply delivering a better product in Llano, with Opteron 6200/4200's and next with Zambezi and other Bulldozer iterations. It's a growing process that must be managed as AMD doesn't have the resources Intel has. Getting the vendors to do the advertising as many are doing with Llano is a nice strategic move by AMD.

 

[Wish I Was Wealthy]

It's competition that makes progress with technology & don't forget that. Even when AMD does better,Intel will have to do better also to stay on top the of hierarchy tables. So stop pretending that AMD will have the top position on the hierarchy tables.

 

[megamanx00]

Bruce Claflin is an idiot. That's all there is to it. Tegra 2 is not exactly perfect since it has a rather high power draw, but it's still rather cheap (like $20 for the chipset in bulk) and trying to produce a fusion CPU with a similar power draw and similar performance for that price is rather impossible to do if you still want to make money.

 

[beayn]

[citation][nom]beenthere[/nom]What many enthusiasts do not understand is business... Advertising is great but 95% of consumers don't know or care what brand of CPU is in a store bought PC. All they care about is price and perceived value. [/citation]

I've worked in computer sales for a long time and lately (last couple of years) most people come in wanting to buy Intel. We stopped stocking AMD because nobody wanted them, and it wasn't worth our time to convince the customer that entry level Intel and AMD were pretty much the same performance-wise.

Advertising does help with consumer perception.

 

[tj_hooker]

A couple of points
Most AMD fans like AMD because of their performance per price, and seem to think this makes AMD ideal for the mainstream user. This is wrong, the CEO needs to evaluate performance per cost. Terminology wise, profit = price - cost and cost is mainly manufacturing cost which is determined essentially by yield (number of working die) and die size. From the outside it is impossible to determine Intel/AMD manufacturing costs, but there are a lot of reasons to think that Intel's are lower 1) They own their fabs and can optimize their fab without regard to other customers 2) as 80% of the market they have greater return on investment in yield improvement 3)They generally are at smaller process node -> smaller die size and they do it on scale that implies they yields are pretty good. Sandy Bridge yields are most certainly significantly better than llano or bulldozers yields. As a business Intel is probably loathe to lower prices, which is why llano isn't seeing more price competition, but AMD shouldn't start a price war to obtain market share if they don't have lower costs. They should price their chips so that they sell their entire factory output. Additionally that implies that if they have a better product than Intel, they should sell it at higher prices than Intel.

People also blindly state that competition is good and while this is generally true, there are some big qualifications in the PC market. First in duopoly it very easy for two companies to collude on price, especially if one party is dominant, and Intel is dominant in manufacturing capacity and cost. There are two ways to think about the size of the PC market/CPU market. You can sell product to people who don’t have a PC, or sell product to everyone because a new PC is so much better than an existing one. The latter way is a much bigger and lucrative market, and describes the last two decades of CPU sales. Maybe this is coming to an end because hardware performance has crossed a threshold, but in any event, the problem of AMD being the performance/price king is that the cheapest system is the one people already have. As the PC market upgrade cycle lengthens and PC market saturates the sales volume of chips goes down, which is bad for profits. Maybe there are markets to grow in the less developed world, but those markets focus almost exclusively on price which gives advantage to companies that have lower costs, it doesn’t really play into AMD’s advantage in graphics. The reality is that Intel’s biggest competitor is its existing install base, even without AMD it would be profitable for Intel to continue the Moore’s law cycle of CPU improvement and charge prices that encourage people to upgrade existing systems. Profit = (Profit/CPU)*(number of CPUs sold), if the average CPU price was a 1000$, a lot more existing systems would be considered good enough, and few people would by a second system such as a laptop. Intel may be a near monopoly, but the price of computing power has dropped more than just about any product in the last two decades, and I would attribute this to the market value of computing improvements vs. the development cost of engineering said improvements much more than I would attribute it to completion between AMD and Intel. Having AMD around definitely limits Intel’s ability extract profit from their customers, but not nearly as much as people think.

 

[beenthere]

While advertising does help perception for some people it is not the defining decision maker for most consumers.

I highly doubt your store stopped selling AMD because people were demanding Intel PCs. Most people could care less what brand of CPU is in their PC as long as it does what they want and fits their budget.

Management decisions are influenced by marketing dollars from Intel. If your company agrees to drop AMD products they get more Intel ad money. That's what Intel has been convicted of over and over because it's illegal...

Products have a life cycle - typically a few years for many consumers. People get bored and want something new. It doesn't matter if it's a car, cellphone or PC. This is why there is constant sales even when the market should be saturated. We live in a disposable society, particularly in the U.S.

 

[jitpublisher]

Branding is EXTREMELY important for sales and vendor partnerships/relations.
AMD does not need a huge campaign like Intel did with the Pentium, but they need to be more in the public eye if they want to build towards something sustainable....like cash flow!

 

[beayn]

[citation][nom]beenthere[/nom]While advertising does help perception for some people it is not the defining decision maker for most consumers.I highly doubt your store stopped selling AMD because people were demanding Intel PCs. Most people could care less what brand of CPU is in their PC as long as it does what they want and fits their budget.[/citation]

I just told you that's what happened. Why else would we stop stocking AMD CPUs? You have some secret insight into our business that I don't know about? 90% of customers said "Isn't Intel better?" or "You mean it doesn't have Intel? Why not? I don't want a knock-off".

The same shift is now happening with more and more people asking for Macs. We don't sell them, but the number of questions about them are increasing (and getting annoying to deal with). Especially when they get infected with a virus, they're all convinced nothing goes wrong with Macs. A perception given ONLY through advertising.

 

[jitpublisher]

[citation][nom]beenthere[/nom]While advertising does help perception for some people it is not the defining decision maker for most consumers.I highly doubt your store stopped selling AMD because people were demanding Intel PCs. Most people could care less what brand of CPU is in their PC as long as it does what they want and fits their budget.Management decisions are influenced by marketing dollars from Intel. If your company agrees to drop AMD products they get more Intel ad money. That's what Intel has been convicted of over and over because it's illegal...Products have a life cycle - typically a few years for many consumers. People get bored and want something new. It doesn't matter if it's a car, cellphone or PC. This is why there is constant sales even when the market should be saturated. We live in a disposable society, particularly in the U.S.[/citation]

I disagree, most consumers want to make educated decisions when they buy, even if they aren't. People would come in a say "I want a cumpooter with one them thar Intel Pendelum's in it"
That is a lot closer to true than you may think. I am not saying that making processors is a way to get rich either, but still, the more people know about you, the better they (should) feel about you, and this is good for your business.

 

[beenthere]

You can disagree all you want... it doesn't change reality. TV advertising is only one means of marketing. As I said in another post above, getting the PC MAKERS to advertise the Llano or Zembezi or Opteron or Bulldozer APUs/CPUs is smart marketing because there are many PC makers and it cost them nothing to add an AMD CPU logo or processor name in their product ads be they on TV, print or online.

AMD does NOT have the marketing budget that Intel has so AMD has to work smarter to get the best return on their marketing budget. 12 million Llano sales in a few months when consumers never heard of Llano shows how effective AMD was with working with PC system builders and why consumers could care less what APU/CPU is in their laptop. Intel was spending boatloads of cash on TV ads and AMD took laptop market share from them with ZERO advertising of Llano.

 

[legacy7955]

[citation][nom]beayn[/nom]I've worked in computer sales for a long time and lately (last couple of years) most people come in wanting to buy Intel. We stopped stocking AMD because nobody wanted them, and it wasn't worth our time to convince the customer that entry level Intel and AMD were pretty much the same performance-wise.Advertising does help with consumer perception.[/citation]

Bingo!

I've seen this myself, even if the customer doesn't actually ask the salesman they usually do look for the intel sticker.

 

[legacy7955]

AMD needs to kill the perception that they are unequal to intel, it certainly wouldn't hurt to do some TV ad spots to break that perception in the consumer's mind. They don't have to saturate the airwaves like intel, that is stupid anyhow, but they should use TV strategically .

I agree about the crooked business ethics of intel, as long as AMD does 9/10 of what intel does performance wise I'll be choosing them for the long term future.

 

[legacy7955]

By the way this guy looks like a grown up Bobby Brady from the Brady Bunch !

 

[knownballer]

Thanks Wolfgang. I too see the firing of Dirk as confusing, and hoped that by now some of that smoke would clear. Yes Dirk turned the company around, but it was really his focus on competing in the market that are the most profitable for them and the focus that to me made him a really good manager. I keep hearing that on phrase "Increasing shareholder value" that makes me think his firing had much more to do with this new trend of investors favoring mobile plays than his execution. It's not very often that a CEO that turns a company around and gets fired...

It's really sad to see and I think they knew they screwed up when they did it and it's probably the why it took 8 months to find a new CEO, and they paid him this much. Firing a good CEO shows a board instability that is very disturbing.



Having said that, Amd's new CEO really needs to do something about the marketing problem. A few hear have said that people don't buy a computer because of a cpu, but I remember going into a best buy back in 98 one of the workers was saying people walk in and want a pentium and don't even know what it is. He went on to explain that the Athlon 64 was better. Marketing works.

I like the idea behind Amd's vision campaign, but looking at it next to Intel's it's not enough. That's probably part of why Read was hired. I expect to see a focus on improving marketing and a deal with Lenovo.



Marketing

I think that this is part of the reason that amd brought in Rory, along with possibly some partnership with Lenovo

 

[jdwii]

Don't fix anything. AMD is on the right track finally. They got smart and moved to other markets and stopped trying to compete with Intel in the dying enthusiest desktop market.

They shipped 15million APU's in the 2nd quarter alone and released 16core quad channel bulldozers for the server market already.

Way to go AMD.

Why the - i Agree Amd has never won for that long on performance products. Even when the Athlon beat the pentium it still did not help Amd much on sales. The APU is giving them great sales(Best in years) Amd the future is Performance/Per watt. Not how many FPS Crysis gets. If you try to compete with Intel on the high end market(250$+) you will lose!!! It was your Price/performance that helped you take share from Nvidia. Make Intel run for the hills not because of the high-end market but because of the mid-high end range and below.


AMD your engineering is close to perfect.
Work on selling your products ADVERTISE talk to businesses to buy them, Amd makes Intel graphics look like their from the 90's. Make advertisements about better graphics better options for video settings(besides contrast and brightness!)

Most importantly stay Alive!