AMD (NYSE: AMD) has struggled to obtain any definite wins in the tablet market, and as the market itself begins to stagnate the company is having second thoughts about competing in the market altogether.
“We’re evaluating [tablets] closely. It’s not our priority,” Kevin Lensing, senior director for mobility solutions at AMD, said in an interview with PC World.
Lensing pointed to the thin profit margins and downward pricing pressure as a reason for AMD to reevaluate this market, especially during a time when the company is desperately seeking profitability.
Instead, as AMD has discussed earlier, it will focus on high-margin and non-traditional markets in order to boost its bottom line. An example of such is semi-custom silicon, which AMD has had great success in winning the contract to place its SoCs in both the Playstation 4 and Xbox One.
Remember Beijing?
Lensing’s lack of enthusiasm for the tablet market is in contrast to AMD’s position earlier this year. At its APU event in Beijing in May, AMD’s Bernd Lienhard, the company’s general manager for its client division, gave the impression that a series of flagship tablet wins from top-level OEMs and ODMs were on the horizon.
“We have engaged with ‘the top three’ OEMs in the world to handpick some of the platforms in the tablet space, and we probably have to wait on them to announce it,” Lienhard said at the time, choosing not to reveal any hardware wins during the event.
But even then Lienhard hinted that AMD was taking a long hard look at the real possibility of its success in the market.
“In terms of tablets, we haven’t been disclosing the design wins. But it’s fair to say that within [AMD] the focus is on the mainstream, value and premium clamshells,” AMD’s Lienhard said at the time. “Where we are today with the products given the performance and graphics, that’s the best fit for us and we believe that’s where our value sits so that’s what we’re going to focus on.”
Standing below a giant
AMD’s competitor in the mobile x86 space has also struggled to get its silicon into tablets and other mobile devices. But Intel (NASDAQ:INTC) has a strategy that AMD simply isn’t able to employ: contra-revenue. Intel, with its massive cash reserves, can afford a massive billion-dollar program to subsidize its entry into the tablet market. AMD cannot.
It’s important to note that AMD hasn’t entirely abandoned the tablet market yet — as Lensing said that AMD will jump when opportunities arise — but when its big competitor in the x86 market is aggressively subsidizing the purchase of its mobile silicon, it’s tough for a company as small and in such a precarious state as AMD to invest serious resources in the market.
