AMD is waving away claims that it plans to pursue the “netbook” category. Instead, the company said it remains committed to a sweet spot it believes resides between standard notebooks and netbooks: the ultra-thin and ultra-light notebook market.
The ultra thin and light market isn’t new, as Jon Peddie, president of Jon Peddie Research points out. Sony came out with a Vaio 505G notebook in 1998 that fit the bill. But it had serious shortcomings as well, like a 10-inch screen.
The concept of an ultra-thin and -light notebook limped along until Apple came along and breathed new life into the market, much like it did with the MP3 player and smart phone. The MacBook Air made a notebook the size of a magazine look sexy, and others have followed suit.
This is where AMD (NYSE: AMD) is aiming, currently with its Neo platform, and in the future with upcoming releases codenamed “Geneva” and “Ontario”.
As AMD sees it, the problem with netbooks is that the low-cost, low-power systems don’t deliver a full PC experience.
“We think we’re going to see a market change where people who may have gone for a netbook spend not a whole lot more money to get an ultra-thin notebook and get a much better experience,” Bob Grim, director of client product marketing at AMD, told InternetNews.com.
“With the ultra-thin market, we see it blending a different set of purchase drivers, where someone desires mobility first, and the experience, the horsepower they need second,” Grim said.
Neo, with its 20-watt power envelope, is aimed at ultra-thin laptops. A more powerful core, codenamed “Geneva,” is planned for 2010, and in 2011 comes the first Fusion-based chip, “Ontario.” This will be a dual-core CPU plus a GPU, all on the same silicon. It will have about 1MB of L2 cache and be manufactured on the 32nm process.
But no plans exist for an answer to Intel’s (NASDAQ: INTC) Atom processor, which has found converts among many netbook PC manufacturers.
“It’s all about the allocation of resources,” Grim said. “We have to be careful what we spend our resources on. We felt there’s more of a future in the ultra-thin space and feel over time people will gravitate toward that space. So we chose to gravitate there.”
AMD will release a second generation of its ultra-thin chipset platform in the third quarter of this year and expects to expand its partner base. Its biggest partner now is HP, which sells the dv2 laptop.
But while the company has a clear stance on netbooks, its partners may not. Grim said he had been at this year’s Computex show in Taiwan, where numerous new hardware designs were on display — and he noted about half of the OEMs called their Neo-based designs “netbooks,” while the other half said they were “notebooks.”
All of this could lead to confusion in the market, but Grim isn’t too worried.
[cob:Special_Report]”Will the lines get blurred? Maybe. So far, we see the purchase drivers of the different form factors holding,” he said. “With netbook, the primary purchase driver we believe is price, followed by mobility. With ultra-thin, we see the primary purchase driver being mobility followed by entertainment/visual experience.”
Peddie also said he thinks the lines will be blurred — on purpose.
“With all the different product categories for the same thing, and the OEMs have to do that to try and get some market differentiation and avoid commoditization, because if the category gets commoditized, then lowest price wins,” he said.
There’s no defining what a netbook is, be it by screen size or processor, because “the marketeers won’t allow that,” he said. “As soon as you lay down a line, someone’s going to cross it.”
Peddie added that he thinks AMD’s strategy is “terribly smart.”
“There’s higher margins and [average selling prices] in thin and light, and AMD has done a really good job in identifying some holes in the market,” he said. “The way they present it is there’s a big gaping hole between laptop and netbook, and said, ‘We have the right parts for that.'”