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Summary:

Qualcomm said today it has purchased AMD’s handheld graphics unit (acquired during AMD’s $5.4 billion acquisition of graphics chipmaker ATI Technologies) for $65 million. The deal shows that AMD is betting big on full-performance machines, from servers to laptops — rejecting its rival Intel’s  move into […]

amd_logo_us-en1Qualcomm said today it has purchased AMD’s handheld graphics unit (acquired during AMD’s $5.4 billion acquisition of graphics chipmaker ATI Technologies) for $65 million. The deal shows that AMD is betting big on full-performance machines, from servers to laptops — rejecting its rival Intel’s  move into the netbook and smartphone world. It also bolsters the claim that AMD paid far too much for ATI back in 2006. So far AMD has written off $3.2 billion from the acquisition, and sold some ATI units — such as this one, and the DTV assets — for a song.

AMD has already passed on making the brains for mobile Internet devices — saying instead it will focus on full-performance, ultra-thin notebooks. Now it’s abandoning the graphics portion of the mobile market to Qualcomm. Should these mobile Internet devices take off, companies such as Nvidia, which offers an integrated CPU and GPU system on a chip that is power efficient, will have a huge advantage over the many chipmakers crowding this market. This is why Qualcomm likely bought these assets, and why Apple is building its own integrated SoC for the iPhone.

AMD doesn’t have the financial strength to play in so many markets, so it has clearly decided to rest the fate of the company on larger, higher performance machines, rather than battery-sipping portable PCs. This may be a smart move, as AMD has tried and failed to enter the mobile market before. Plus, with its high-end processors powering the servers that run computing clouds, a mobile computing world in which a user’s information is stored in the cloud will still generate sales for AMD. But like all big bets without a hedge, this one is risky for a company in an already precarious position.

  1. [...] unknown wrote an interesting post today onHere’s a quick excerptQualcomm (s qcom) said today it has purchased AMD’s handheld graphics unit (acquired during AMD’s $5.4 billion acquisition of graphics … [...]

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  2. [...] not interested in the netbook market where Intel’s Atom processor is king.  But as GigaOm points out, there is still money to be made by AMD in the portable device market as more and more devices rely [...]

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  3. [...] For AMD, ATI Buy Turns Into a Graphic(s) Bloodbath (Om) [...]

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  4. I’ll agree with AMD although I always buy Intel (friend works there). I just bought a slick new loaded laptop direct from HP (shopping.hp.com) for $608, free shipping. Why spend $300 for a netbook? The laptop will continue to become faster, more affordable and more capable. This will eliminate the need for the smorgasbord of limited value devices folks are trying to peddle.

    Now I have a fully uncompressed digital signal between my PC and TV:
    http://pctvcables.com/hdmi-pc-to-tv-cables.html

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  5. [...] there is always the doubt if cannibalization has anything to do with the loss. On the other side AMD says they will not address the market for netbook processors, instead putting all eggs on the hi…. WMulti-core CPUs away from desktops? addthis_url = [...]

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  6. Ignoring the growing mobile devices market to fight in familiar but failing territory is going to be a brief Pyrrhic victory for AMD.

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  7. [...] For AMD, ATI buy turns into a bloodbath – GigaOM [...]

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  8. [...] The perpetual underdog role is wearing thin. AMD is playing second fiddle to Intel on the x86 side, Nvidia on the graphics side and doesn’t even have a mobile strategy. Splitting off manufacturing isn’t the [...]

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