All Your Eggs in One Basket

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After two years of unfettered success AMD had dragged itself up from a position where it made a loss in most quarters and it was now making money, but it had achieved this during a period when Intel spent most of its time shooting itself in the foot.

This was about to change.

In July of this year Intel launched Core 2 Duo and then it backed this superb dual-core processor up with the quad-core Core 2 Extreme QX6700 in November. In a matter of months gamers switched from AMD to Intel. However, they had a problem, as LGA775 motherboards used either an Intel or ATI chipset, and therefore could not support nVidia graphics cards in SLI. When AMD bought ATI it put the kibosh on the ATI-Intel relationship, reducing the options still further.

Hardcore gamers could run a Core 2 Duo on an Intel 975X motherboard provided they were content to use Radeon X1950 XTX graphics, but that also changed this week when nVidia launched its GeForce 8800 GTS and GTX. These stunning new graphics cards have moved the goalposts so far, that anyone building a gaming PC would be desperate to combine a Core 2 Duo and GeForce 8800, which means that they also want an nForce 680 SLI motherboard which leaves AMD and ATI in the lurch.

If you follow that line of thinking then AMD is going to sink without trace, although the ATI R600 graphics chip may change part of that picture early next year.

Except that it’s all nonsense.

The sort of gamer who moves from Athlon 64 X2 to Core Duo and has the £400 or £500 for a GeForce 8800 is a tiny percentage of the PC market. One in a thousand perhaps, or maybe one in ten thousand.

There’s no doubt that Intel has reclaimed the high-end of the PC market and it will likely turn the tide in the server market, which means that AMD has no choice apart from going mainstream. That means a PC with acceptable performance, integrated graphics and a low price, which is territory that has been dominated by Intel with its Celeron and ludicrously named Extreme graphics.

AMD hopes to be saved by some fortuitous timing - Windows Vista is about to hit the streets. The Premium version with the 3D Aero interface puts a heavy demand on your graphics and AMD thinks that it has the edge on Intel in this department. There’s no problem getting ATI graphics to run Aero but Intel has all of its money backing a single horse in the shape of the 965G chipset. Not the Q965, which uses the feeble GMA 3000 graphics core (an update of GMA 950) but the G965 which uses the all-new GMA X3000 core. Make no mistake about it, GMA X3000 will run Windows Vista but AMD is betting that the punters will see the difference when they run Vista in its graphics.

Where will you buy a PC with AMD/ATI silicon? Well, the channel is complaining that it can’t get AMD processors because AMD is shipping everything that it can make to Dell, AMD’s new best friend. Dell has reason to be hacked off with Intel after the fiasco of Pentium 4 and it was none too pleased that Intel decided to jump into bed with Apple.

So let’s recap.

Earlier this year most budget PCs were powered by Intel while AMD ruled the world of gaming but in 2007 AMD expects that Windows Vista will turn that situation on its head thanks to the power of its integrated graphics.

On paper that argument makes perfect sense but ask yourself this. Based on your personal experience of what people will put up with - think CRT monitors flickering at 60Hz, overhead lights reflecting on the screen like crazy and a screen that is full of toolbars and other Spyware infested junk – do you really think that the punters will notice that Aero isn’t quite as slick as it ought to be? I have a horrible feeling that AMD is putting far too much faith in the buying public.

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