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Dell's stance on AMD: Look but don't touch

By John G. Spooner, CNET News.com on February 24, 2005

Summary

Dell CEO Kevin Rollins acknowledges that the PC maker leaned toward AMD chips recently but says Intel's now back in the saddle.

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Dell and AMD might never be a match.

Dell--the only major PC maker that doesn't currently use Advanced Micro Devices' chips in at least one product line--on Wednesday confirmed that after leaning toward AMD chips in 2004, it's now leaning in the other direction. Dell continues to sell only computers with Intel Inside.

Kevin Rollins, Dell's CEO, told attendees of the Goldman Sachs Technology Investment Symposium in Phoenix that Dell looked harder at AMD during Intel's difficulties in 2004. He also predicted promising days ahead for AMD.

AMD has "done some nice things, and they are making some headway," Rollins said. But "do I think that that's going to be enough to have us move off (of Intel)? Well, now it's looking like no. For a while, it was looking like yes."

Technically, nothing about Dell's stance on AMD has changed. Dell executives' standard response has been that the company constantly evaluates AMD's chips, as well as those from other suppliers, but that it currently has no plans to offer AMD chips in its PCs. That remains the stance, Rollins said.

But during 2004, Dell executives, including Rollins, started following up their standard retort about plans for AMD chips with numerous accolades for the chipmaker, raising speculation that Dell was close to announcing an AMD Opteron server or maybe a desktop based on AMD's Athlon 64 FX chip.

The time may still come
Last October, Rollins and other Dell executives praised AMD for its recent progress. They called it a technology leader in moving standard PC processors to 64-bit addressing and praised its development of dual-core PC processors.

"We believe there will come a time when we use AMD products, too," Rollins said during a November appearance in Boston.

Meanwhile, Intel suffered a number of troubles in 2004. The chipmaker delayed a new version of its main notebook chip, the Pentium M, and pushed back or even cancelled forthcoming desktop Pentiums. But Intel--which also introduced 64-bit extensions into its Xeon server chips and sped up its plans to deliver dual-core processors in 2004--has since turned things around, Rollins said.

Actions such as adding 64 bits and speeding up dual-core development put Dell customers at ease, Rollins said. That, in turn, eased the minds of Dell executives.

"Whenever one of our partners slips on either the economics or...technology, that causes us great concern," he said. "For a while, Intel admittedly slipped technologically, and AMD had made a step forward. When that happens, you're going to see us respond."

Still, it would be premature to say Dell won't move in AMD's direction again in the future, Rollins said.

AMD, for its part, is trying harder than ever to woo Dell. The company has added an ally in Mort Topfer, a former Dell vice chairman who now sits on AMD's board of directors.

Given Dell's new goal of hitting US$80 billion in annual revenue--a goal that will require the company to increase its share of the PC market considerably--some analysts believe that it's a matter of time before Dell chooses to build a line of AMD-based computers.

"They have come close many times," Nathan Brookwood, an analyst at Insight 64, said of the companies' relationship recently. "I think of it as Lucy holding the football for Charlie Brown."

Related stories

For Dell and AMD, a tantalizing question

AMD preps high-performance chips for desktops

Dell's dirty words: outsourcing, proprietary

Intel's Dothan chip expected in May

Former Dell exec takes spot on AMD board

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