AMD has been holding a series of events to pre-announce its new approach to the consumer laptop market, which it is launching today as the Vision strategy. Rather than join Intel in the Netbook craze (although it admits that Acer uses its chips in one such form factor), it has decided to try to change the game by adopting a different approach to marketing. In particular it has selected a number of criteria it believes are more important to consumers in selecting a laptop – ditching the usual technical speeds and feeds that dominate current retail marketing. Its approach is reminiscent of its decision a few years ago to shift from clock speeds to comparative performance – arguably a move that Intel followed. It will be interesting to see whether this time its new approach will also lead to a change in the way laptops are marketed through retail distribution.
What’s Wrong With Current Speeds And Feeds?
Having conducted extensive research with consumers AMD discovered that the current information provided to consumer purchasers is largely irrelevant. Knowing which chip brand, the number of cores and the processing speed provides little guidance when the laptop is being purchased for home use. In addition it is very difficult for retail salespeople to ‘up sell’ based on the technical speeds and feeds provided. Currently AMD provides 221 different stickers to identify its products on the front of its OEM’s products.
What New Speeds And Feeds IS AMD’s Vision Addressing?
Instead AMD believes that consumers are interested in entertainment criteria. They want to watch high definition TV and video (they’re more likely to understand what 1080p is than the technical description of the laptop they might buy), they want to play games, they want to surf the Internet and some of them want to create content (web sites, video, music, etc.). AMD is seeking to provide point of sale information to help them decide the quality of the product to support these needs. It breaks classes of machine into three categories, which are:
- See – the products which meet entry-level requirements with good, but not enhanced, video and allow users to search the Internet.
- Share – the products which allow more advanced use, with higher definition video, blu-ray DVD for users who spend time on social networking sites and want to watch HD video and TV on their computer
- Create – products which support the highest quality video (up to 1 billion colours shown on a 10-bit screen), blu-ray DVD, the ability to record live TV. These are for advanced users who create as well as access advanced content.
Clearly AMD is playing to its advantages in providing the highest quality graphics which it now integrates into the silicon of its processor. It also provides a single HDMI connector on its motherboards, allowing users to connect their laptops to their TVs more easily than before.
The Success Of AMD Vision Is Tied To The Launch Of Windows 7
In the current market downturn consumers are proving to have more money to spend than businesses, making today’s announcement potentially more lucrative for AMD. It has decided that this campaign will run for a minimum of three years, so it’s not in it just for the short term. At launch it had signed up an impressive list of OEMs including Asus, Acer, Dell, HP, MSI, Toshiba and DSG International. All have products designed, manufactured and ready to sell.
Against the immediate success of Vision is the need to wait for Windows 7, which is not being released until October 22nd. Associated products have already missed the ‘back to school’ market and will miss about a month of the Christmas buying season as well. However, the timing of Microsoft’s release will hold back all sales – not just AMD’s.
AMD has gone through very difficult times this year as all microprocessor companies have (see Figure 1). By definition it is a hardware vendor and the decline in its revenues demonstrated that it took the brunt of the failure of purchasing in the dramatic downturn in ITC spending. It has responded by restructuring its organisation. Its new approach to the consumer market will give it the advantage of simplifying its product line, possibly reducing the number of designs it manufactures in the process.
I’m particularly impressed with the potential of its new marketing to appeal to non-technical consumer purchasers. The rest of my family are bemused by the technical decisions I try to balance on their behalf when choosing a new machine. Very few PC suppliers have been able to follow Apple’s lead in addressing usage and design issues, with the possible exception of Sony. As the months roll by it will be interesting to see the extent to which AMD sticks to its guns, avoiding backsliding into the technical marketing understood by the industry, but not the consumer.