AMD taps loyal fans to spread the word

Summary:The chipmaker is in the midst of a marketing strategy to convince consumers, as well as corporate buyers, that its Athlon XP and Duron chips provide better performance and cost less than rival Intel's. Secret weapon: offbeat marketing.

LAS VEGAS--What's the key to Advanced Micro Devices' future? Benchmarks and body paint.

The Sunnyvale, Calif.-based chipmaker is in the midst of a multi-pronged marketing strategy to convince consumers, as well as corporate buyers, that its Athlon XP and Duron chips provide better performance and cost less than rival Intel's Pentium 4 or Celeron processors. AMD is talking with computer labs and benchmark testers to come up with new performance metrics for comparing its chips. Kevin Knox, a Gartner analyst turned AMD executive, is also hosting roundtables with CIOs to discuss the benefits of AMD's chips in a business environment.

While corporate America to date has largely refused to adopt Athlon computers, the barriers are beginning to crumble.

"I think there is acceptance. I hear more and more customers asking about AMD in the corporate space," said Achim Kuttler, director of Hewlett-Packard's PC client business, who nonetheless added, "but there is a big difference between asking and buying."

AMD is also tapping its loyal fan base to spread the word. Like Apple Computer, AMD has developed a fervent following with a segment of the computer buying public, and it is staging events across the country that allow consumers to talk--or sing--about their favorite processor to other potential buyers, said Patrick Moorhead, AMD's vice president of customer advocacy.

So far, it seems to be working. At a recent event on a cold morning in Chicago, five shirtless guys sporting body paint came out to see the AMD roadshow. If lined up right, the first three spelled "AMD" while the next two sported the company and Athlon logos. Others come onto the stage to sing songs about AMD chips or chant anti-Intel slogans.

"We are not going to be the redcoats," Moorhead said. "We hide in the trees. We do untraditional marketing. So far, it's been a runaway success."

"It definitely seems like a cult following," said Dean McCarron of Mercury Research. "Part of it is an underdog thing. It is similar to the 3Dfx Mafia," referring to 3Dfx, a former graphics powerhouse. Attendance at some of these events has been double expectations, he noted.

AMD's marketing effort comes at what the company, and some analysts, believe is a historical juncture. Although AMD is once again in the red, its chips are being hailed for their performance. For the third year in a row, the influential Microprocessor Report has named Athlon the microprocessor of the year.

"Intel is screwed. End of story," said an ebullient Jerry Sanders, AMD's CEO, during an impromptu interview here at Comdex this week. "Even if they got 100 percent of the business, they still couldn't fill their fabs."

"I don't have any comment," said Chuck Mulloy, an Intel spokesman, chuckling. "He doesn't have any visibility into our business."

Sales trends also show some positive signs despite a slow market and declining prices, said Rob Herb, executive vice president of sales. AMD has already sold out two versions of the Athlon for the quarter. While arguably this means that AMD faces a shortage on some models, the company notes it also means that the chips are selling better than forecasted.

A major thrust of the marketing initiative will lie in establishing new performance metrics that AMD can tout to both consumers and businesses. The new comparative metrics won't exactly be benchmarks. Instead, they will examine how well Athlon chips do on real world tasks. Intel is engaged in a similar effort.

"How many minutes of video encoding will this save me? That is what people care about," Moorhead said. "Our intent is to use a third party to validate these...We're in the information gathering stage. We have been meeting with the suite of benchmarking people. We are meeting with the labs."

While AMD will no doubt advertise favorable results, the company also has to watch out for legal snares. Germany, for instance, forbids product comparisons between competitors.

Additionally, in the corporate world, AMD will concentrate on trying to get its chips into notebooks and servers. In servers, the company will first tap the legion of small, so-called white box manufacturers, a historically strong market for AMD in desktops, and continue to try to land design wins with major label providers.

"All it takes is one of the big five guys to make it happen," Moorhead said, adding that "40 percent of the server market is outside the top six."

Notebook customers, meanwhile, are warming to AMD's message. Hilary Glann, marketing manager for the mobile computing division at HP, said AMD is becoming more accepted in those machines. "I think Transmeta helped AMD. They legitimized them," she said. (Observers have said the arrival of Transmeta helped promote the use of non-Intel processors in notebooks.)

Finally, AMD will continue to try to expand its consumer base through its underdog approach.

"Intel is seen as an evil company that forces standards down throats. AMD is seen as a company that pays attention to the "diy" (do it yourself) and gamer crowd," wrote Chris Tom, co-editor of the enthusiast Web site AMD Zone. "People are braving cold weather early in the morning up north and waiting for hours for AMD to show up. The Athlon XP has done better than I expected with users."

Topics: Hardware

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