Dell: We're committed to AMD but...
Update below: Dell is trying to quell worries about its relationship with AMD.
A blog ruckus has emerged after Engadget and DailyTech and others reported that Dell pulled AMD-powered desktops and laptops from Dell.com, which represents the bulk of the PC maker's sales. Instead, Dell pushed folks that wanted hardware with AMD's chips to its retail channel--Best Buy and Wal-Mart for instance.
Dell's digital media manager Lionel Menchaca responded in a blog post, noting that the company does sell AMD-powered notebooks, desktops and servers online. Menchaca said there's no AMD conspiracy afoot and noted:
"We are committed to the AMD product lines as a long-term partner to provide the maximum choice for our customers."
Menchaca said Dell tweaks its selection all the time. However, Menchaca noted that "currently the majority of our Inspiron AMD-based systems are available through our retail partners."
So what's going on here?
ZDNet's laptops and desktops blogger John Morris says Dell may just be trying to clear some inventory in the retail channel.
(Dell) could simply be allocating its inventory of AMD processors, which are typically less expensive, to PCs sold in retail where margins are thin and where AMD is already a big part of the mix. And it may be trying to use up its remaining inventory of Athlon X2s while it waits for the Phenom B3 stepping, which fixes a problem with the cache, and faster clock speeds sometime in Q2.
It also appears that Dell is trying to segment its markets. AMD goes to Dell's retail channel in a move to differentiate its offers and put lower-priced models on shelves. Reading between the lines, you could argue that Dell is saying that AMD-powered hardware is a downmarket strategy. Under this logic, Dell is implying that Intel-powered models are more upstream.
Simply put, Dell's selection of AMD-systems offered online has more to do with carving up the customer base than any technology statement.
Frankly, I don't get what Dell is trying to do--but then again I'm not much of a marketer. There's probably some marketing study at Dell that outlines the strategy. Ideally, I would be able to simply pick my chip just as I would productivity software. It might be naive but wouldn't it be swell if all products gave you a choice of AMD or Intel chips. Offering a Vostro notebook with an AMD chip is one thing. Offering one of those snazzy red Inspirons with a AMD chip is another story entirely.
What does this mean for AMD? Some folks have noted that the Dell moves don't bode well for the partnership in the future. That's a bit premature. Perhaps Dell will be more constructive when AMD ramps up its quad-core lineup in volume. It's quite possible that AMD's execution issues have dinged the Dell partnership and relegated the chipmaker to a low price value PC category.
For now, you could argue that AMD is a second class partner--if you believe that the higher end customers buy online instead of retailer. The big question is whether AMD will remain second fiddle a few quarters from now.
Update: Dell has issued a statement on the AMD matter. Here it is:
To ensure we deliver the best value to our customers, Dell regularly adjusts its product offerings, and how customers can purchase those products. Currently the majority of our consumer AMD-based systems are available through our retail partners such as Wal-Mart, Best Buy and Staples, and through telephone sales. Dell also sells a range of AMD-powered business notebooks, desktops and servers online. Certain product ranges or models may only be available through specific channels such as retail or phone. We are committed to the AMD product lines as a long-term partner to provide the maximum choice for our customers.
To drive the point home Dell listed the following AMD system available online: