AMD sitting out smartphone market

AMD has no immediate plans to enter the smartphone market and will focus on tablets and PCs for growth

Advanced Micro Devices is not immediately chasing the market for smartphones as it does not align with the company's strength in technologies like graphics, an executive said on Monday.

Smartphones are constrained on battery, pixels, and screen space, and AMD has other areas it can focus on in order to grow, said Rick Bergman, senior vice president and general manager for AMD's product group during the Pacific Crest Securities Technology Leadership Forum in Vail, Colorado. The company sees an opportunity to apply its graphics and chip technologies to tablets, where customers are demanding better video and battery life.

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"We haven't announced any plans to go in that handheld space. We've got plenty of opportunities... in server, notebook and now tablets, that's our immediate focus. But if the right circumstances come up and we can see a way to impact the market, we'll obviously continue to look," Bergman said.

AMD has faced criticism for not aggressively pursuing the booming smartphone or tablet markets. The company in June rushed to release its first dedicated tablet chip, called the Z-series. The chip is a low-power variant of PC chips based on the Fusion microarchitecture, which includes a graphics processor and CPU on a single chip. Based on the x86 architecture, the chip can help tablets deliver a full PC and graphics experience, the company has said.

AMD will join Intel in an attempt to unseat ARM, which dominates the tablet market. Intel is also pushing the x86 architecture to tablets with its Atom chips, and hopes to reduce chip power consumption over the next few years to a point where it can match ARM, whose chips are considered more power efficient. Intel is also entering the smartphone market with Atom, though there is no "Intel Inside" smartphone yet, and the company is considered to be many years away from making any meaningful impact.

Earlier this year, rumors emerged that AMD was pursuing an ARM license, which was ultimately denied by AMD. AMD has not announced anything related to ARM, Bergman said, also reiterating the company's commitment to x86 architecture.

"We're excited about what the tablet market can do for AMD," Bergman said.

Beyond tablets, AMD will release this quarter server and desktop chips based on its new Bulldozer architecture, which has been in development for around five years. The Opteron server chip based on Bulldozer, code-named Interlagos, has up to 16 cores, and will be up to 40 percent faster than existing chips with up to 12 cores, while consuming the same amount of power, Bergman said. The desktop chips include up to eight cores and will be used in high-end desktops aimed at uses such as gaming.

The Interlagos chip provides AMD with an opportunity to gain back server market share from Intel, Bergman said. Beyond more cores, Opteron chips will provide a power-performance advantage for tasks ranging from cloud to high-performance computing, Bergman said. AMD's Interlagos chips could also reach market earlier than Intel's newer Xeon server chips, which could help gain back some market share.

"We frankly look back over the last couple of quarters, we've been disappointed with the results we've seen from our server businesses as we ceded some market share there," Bergman said.

AMD gained processor market share during the second quarter, but lost server market share, IDC said in a study last week. AMD had a 20.4 percent overall microprocessor market share, gaining from 19 percent in last year's second quarter, while Intel had a 79.3 percent market share, down from 80.7 percent. However, AMD's server microprocessor market share slipped to 5.5 percent from 6.5 percent a year, while Intel dominated with a 94.5 percent share.

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