Dell Unveils First AMD-Based Laptops

There was little fanfare but far-reaching ramifications for the PC industry this week as Dell (Nasdaq: DELL) rolled out its first notebook computers powered by processors from Advanced Micro Devices (NYSE: AMD) .

Despite Dell's lack of marketing behind the move -- which follows on the PC giant's splashier offering of AMD desktops earlier this fall -- its use of non-Intel hardware is seen as a significant shift for the PC industry.

"It's significant because the majority of PCs sold now are in the notebook space," Current Analysis Senior Analyst Toni Duboise told TechNewsWorld, referring to the fact that a 60 percent share of the PC market is held by laptops. "At any rate, this is definitely a bigger market. It's also one where Intel (Nasdaq: INTC) has held the top spot."

Jumping on the Bandwagon

Until this year, Dell remained among the only Intel-only PC vendors in the market, and was the sole major PC manufacturer that did not offer machines with AMD processors, which have succeeded in winning market share from Intel on price and performance in server computers.

In September, Dell rolled out new Dimension desktops using AMD Athlon and Sempron processors. Dell, which released AMD Sempron and Turion-based Inspiron 1501 notebooks this week, was expanding a space normally dominated by Intel, according to Duboise.

"Basically, [notebooks are] an Intel stronghold," she said.

Buyer Benefits

Consumers had benefited from the price wars and central processing unit (CPU) battle between Intel and AMD, which brought more choices at lower prices, Duboise added. The trend will be further fueled by Dell's use of AMD chips in its PCs.

"Now that AMD has cracked Dell, that instigates or is a catalyst for more aggressive prices," she explained. "It feeds into the buyer's market," claimed Duboise, predicting "barn burner sales" this holiday shopping season.

Dell's use of AMD processors highlights how landing the big PC maker accounts is no longer a matter of who wears the performance crown, Endpoint Technologies founder and President Roger Kay told TechNewsWorld. He called the new Dell notebooks part of a broader rollout and long-term relationship between Dell and AMD.

Supply Downside

Dell's entry into the AMD market is reportedly causing some supply shortages, hitting smaller PC makers and builders hard. Despite AMD's strong relationship with smaller and independent vendors, Kay indicated that the larger players like Dell get priority on supply.

"Dell has a seat at the first table," he said. "When supply is tight, it's the smaller and white box guys that get hurt."

Dell's impact on AMD inventory had not yet been quantified, Duboise maintained, but she indicated Dell may be more important to AMD with the holiday season approaching.

She also referred to a need for caution from AMD, since the company may find itself suffering from the same holiday supply shortages that two years ago hampered Intel.

"AMD has to tread very, very carefully to avoid that," she warned.