AMD Poised To Finally Capture DellAMD Poised To Finally Capture Dell

The long-anticipated introduction of the first Dell computers using processors from Advanced Micro Devices is expected to come within weeks--or at the most within a few months--providing yet another impressive milestone for AMD and giving Intel another black eye to go along with the bloody nose it has been nursing the past two years.For most observers, the only surprise is why Dell has waited so long to jump on the AMD wagon. All its major competitors, from Hewlett-Packard and Lenovo in the PC market to HP, IBM, and Sun Microsystems in the server market, have been busy building up significant business using AMD processors, while Dell has steadfastly and stubbornly clung to its Intel-only policy.

Observers believe that Dell has been able to leverage its position as a leading volume vendor of computing equipment, and its exclusive relationship with Intel, to get advantageous pricing from Intel in the past. What ever that "favored son" relationship has given Dell in the past, however, may have finally been outweighed by lost position in the marketplace as AMD has increasingly outperformed its larger rival in bringing advanced processor technology to the market.

Multiple analysts in the past few weeks have issued reports stating that despite Intel's recent ability to manufacture a demonstration chip using an advanced 45-nanometer process technology, probably a full year or more sooner than AMD, Intel remains as much a full year behind AMD in being able to translate that technology superiority into better performance at the production level for processors actually being offered in the market, particularly in server applications.

Dell tipped its hand in November when it began to offer AMD processors for sale on its Web site. The official company line was that the move was not a precursor to its own use of the AMD products, but everyone saw the move as a floating a trial balloon and testing the waters for the inevitable move to offer AMD-based PCs and servers.

Intel scored a win last month when Apple, which had stubbornly clung to the PowerPC processor years after it became evident that processor architecture would never fulfill its early promise, began making its transition to Intel processors. Having Apple as customer could eventually provide Intel with an additional three or four percent PC market share gain. That incremental advancement, however, could be more than offset if megavolume producer Dell begins to move a significant percentage of its business to AMD.

The potential for AMD to push its overall x86 processor market share, which reached 21% in the fourth quarter of 2005 according to Mercury Research, past 25% or more this year looks increasingly realistic. That made the opening of AMD's new megaprocessor manufacturing plant in Dresden, Germany, another significant milestone for AMD as it secured the capacity to potentially serve an ever larger percentage of the market in the years ahead, and helped convince Dell that AMD was finally the stature of partner it could trust.