Original URL: http://www.theregister.co.uk/2006/01/31/dell_amd_march/
Dell to betray Intel with AMD mobile chip embrace - analyst
Beware the Ides of March
Dell's embrace of AMD processors will turn from myth to reality by March, according to a financial analyst.
Dell will begin by slotting AMD's chips into its notebook product line and then "likely" move to use AMD chips in servers and desktops as well, American Technology Research analyst Doug Freedman said in a fresh note to customers. Rumors of Dell breaking its Intel-only stance have circulated for years. This, however, marks the first time we've seen an analyst slap a specific date on the speculation.
"We believe there will be an AMD/Dell deal announced very soon; more specifically, we believe it will come as early as March," Freedman wrote.
The analyst said investors have already sent AMD shares higher on the notion that Dell will eventually become a customer. Still, the actual announcement of such a deal would likely kick AMD shares 10 per cent higher, while knocking Intel's slumping stock down five per cent.
Dell has watched from the sidelines as servers, desktops and notebooks running on AMD chips have gained gobs of market share from rival Intel products. On the server side of the house, in particular, AMD holds up to a two-year technology lead over Intel, according to some analysts. IBM, HP and Sun Microsystems all sell servers with AMD's Opteron chip.
"Currently, AMD is in a strong position with price advantage as the low-cost provider, and a technological advantage with its SOI, low-power, integrated memory controller and dual-core solution," Freedman wrote. "While we think that Intel should avoid a price war, we also believe investors are becoming overly concerned with such a situation."
Lucky for Intel, AMD simply cannot produce enough chips to take as much share from Intel as its technology would likely allow, according to the analyst. This buys Intel a bit of time to rework its products and come back stronger.
Despite such optimism for a Dell/AMD alliance, we'll believe the hookup when we see it. ®