AMD Q1 results indicative of slumping PC market?

Chip maker AMD has released their financial results for the first quarter of 2013, showing disappointing figures in light of a "difficult market environment".

The company posted a gross revenue of $1.09 billion, representing a year-on-year decrease of 31% and a gross margin of 41%. This vastly lowered income gave rise to an operating loss of $98 million - upped to $146 million when operating costs are taken into account. Shares also slumped $0.19 to their current trading value of around $2.50.

Rory Read, AMD's president and CEO, said in an interview:

Our first quarter results reflect our disciplined operational execution in a difficult market environment.

Read went on to add:

We have largely completed our restructuring and are now focused on delivering a powerful set of new products that will accelerate our business in 2013. We will continue to diversify our portfolio and attack high-growth markets like dense server, ultra low-power client, embedded and semi-custom solutions to create the foundation for sustainable financial returns.

The boss' words may seem comforting and positive, however the company's move to drastically cut chip orders back in December both explain poor financial results and may suggest darker days are yet to come. 

Results such as these from a company whose main market is PC manufacturers are understandable given a slumping market in favour of more portable devices. Tablet sales continue to increase and are expected to meet PC shipments in the very near future. Notably, in Read's statement he mentions AMD's future investment into the "ultra low-power client" market, likely offering processors for mobile devices that are refreshingly conservative with power usage.

AMD remains optimistic, however, expecting revenue to offer a better outlook in Q2:

For the second quarter of 2013, AMD expects revenue to increase 2 percent, plus or minus 3 percent, sequentially.

Source: AMDImage: Techspot

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AMD are not helped by the fact that they only make one good desktop processor (8350) and that it can only compete with Intel's highest tier offerings in very, very, very select circumstances (i.e. programs that are fully multithreaded 100% of all operations for 100% of the time.)

It competes with i5s just fine, but then again people that overclock tend to do better with the i5s there too.

This company just doesn't know how to make money. I remember that even in the years on Pentium 4, when they dominated the market with Athlon, their quarterly results were always poor, and they were making just 50-60 millions USD in profit, comparing to Intel which still made billions - literally - in profit.

They didn't dominate anything because Intel was paying OEMs not to use AMD. That being said, their management has been **** for a while now.

Excuse? Go educate yourself on it.

Intel paid AMD 1.25 billion in damages after the fiasco but even that was a small fraction what AMD actually lost due to the shady tactics Intel used back them. Now..AMD just can't gain traction in CPU's anymore and more over it's mostly the fault of the management since they are business men and have no idea what to do to bring AMD back on the map. Automated CPU design..right Rory, kill yourself if you actually thought that will help.

http://www.dailytech.com/FTC+I...+Practices/article19265.htm

"Intel is also banned from specifically redesigning its chips to harm its competitors. Specifically it will be forced to not limit the performance of rivals' GPU chips for at least the next six years. Also, it must publish clearly that its compiler discriminates against non-Intel processors (such as AMD's designs), not fully utilizing their features and producing inferior code."

To also add this then. And it's not the first time Intel has done this and probably not the last.

Still to this day you see only few AMD based laptops/PC's (OEM ones) and even those are way overpriced from the OEM to make Intel look better once again.

Edited by alwaysonacoffebreak, Apr 19 2013, 9:08am :

alwaysonacoffebreak said,
Excuse? Go educate yourself on it.
Still to this day you see only few AMD based laptops/PC's (OEM ones) and even those are way overpriced from the OEM to make Intel look better once again.

This is outright bull****. There are lots of AMD based laptops for sale. They just tend to be low end junk (ie Acer) so most people skip them. AMD can only blame themselves for their current financial woes.

maybe if PC manufacturers started making compelling products,their devices will sell.

According to Microsofts earnings report

Windows revenues UP %23 YoY, non OEM Windows revenues are UP 40%,meaning people are deciding to upgrade and not buy new PCs because these new PCs are not that compelling.

I love all the **** talkers like some PC oems, and firms like IDC who can go to hell with their worthless drivel.

There just isn't nothing the OEM's can offer at this point of time that would "force" people to upgrade. All in all OEM PC's are mostly utter crap, space in the case is non-existent, Intel mobos are the cheapest around they could use (Max 8GB RAM, 1 PCI-E x16 slot) and the price is the highest they could slap on it, I mean c'mon.

The first gen and 3'rd gen i-series only differs in benchmarks for regular people but the truth is the 1'st gen does the job for them just as good, same goes for AMD x4 P2.

It used to be you needed a new PC every 2 years to stay anywhere close to current. These days, unless you're an uber hardcore gamer who must have the best of everything you can likely get away with 3 or 4 years with ease and even then you might just do incremental upgrades like a bigger hard disk or some more RAM which will cost little.

Even the first intel quad cores from like 2007 will still do the job on most applications these days.

At the moment I live in a rural area with iffy internet so I don't bother with gaming. Family member picked up a dual core based lenovo machine from about 2006 when their workplace was throwing them out. Has 2GB ram and onboard graphics but it ran Win 7 fine and now runs Win 8 with no issue.

If you'd tried to put Vista on a PC from 2000 people would have recommended you seek psychiatric help...

Companies have spotted that they can make tablets the new "disposable" computer. You can't really upgrade them yourself and the companies will just conveniently withhold OS or software updates. Up the screen resolution and camera specs on a set schedule (worked out in advance) and the hipsters will flock to buy the newest one every year or two and get their wallets emptied that way.

The savvy will spend $800 on a PC and watch it last 7 years rather than spending $400+ every summer on the newest-easy-to-drop-and-smash effort.

Edited by Sandor, Apr 19 2013, 1:35am :

I think this will all change after the PS4 and X720 is out.. because they will be able to handle way better graphics people will need PC's to keep games running on high settings.. The state of pc's is because of the ps3, xbox 360 and the ipad.. Games being written for these are not very graphic intensive and the PC ports can run on really crappy hardware..

Lachlan said,
I think this will all change after the PS4 and X720 is out.. because they will be able to handle way better graphics people will need PC's to keep games running on high settings.. The state of pc's is because of the ps3, xbox 360 and the ipad.. Games being written for these are not very graphic intensive and the PC ports can run on really crappy hardware..

I agree some games on the PC can run on pretty mediocre hardware (Modern Warfare 2 or 3 for example) which were rehashed xbox games.

Battlefield 3 on the other hand looks comical on consoles compared to the PC version.

Just depends on the developer and which way they choose to go.

I always prefer PC gaming though...just feels better than consoles.

Lachlan is correct, it does that every generation as far as gaming goes. because any decent PC's over the last 4-ish years or so will still be able to have playable games nowadays (maybe not liquid smooth gaming performance but playable). but once the next gen consoles arrive PC's will quickly become outdated again until roughly a few years pass to where PC's can comfortably run the console stuff again and then you will be set for a while again until the next gen arrive and the cycle just keeps on going.

p.s. i got a i3-2120 CPU and that should be able to comfortably run any game at least until the next generation of consoles have been out a little while and then it will probably become dated especially if 4-cores start becoming the standard for games to NEED which i would not be surprised if that happens.

PC its already perfected, and dont worry smartphones and tablets its going the same path, with octa cores processors and more ram there will be one point that people dont find or need to update their current phones and tablets.

Im happy with my current dual core phone i just moved to it from a blackberry, and like anything their pro and cons but im still ok with what i got.

except, those tiny things don't have long life either phones and tablets will stop working after warranty is expired or you are gonna break them accidently.

Haven't upgraded my PC (Q6600) since 2007. Until now, this was basically fast enough for anything I wanted to do. Software hasn't kept up with hardware. I'll be upgrading this year though, as my set up is a bit long in the tooth for a few things, and I'd like to take advantage of UEFI as well.

The decline in PC sales is not only at the feet of smartphone/tablets, but at the feet of software writers to aren't writing programs that take advantage of all that power. Maybe AMD and Intel can focus on that too, not just lowering their TDPs.

I think the 8 core PS4 and Xbox720 will really jump start the industry to accept more cores.. It will be a huge step for the gaming industry instead of just writing everything for dual core processors.. When more programs are written for more cores then AMD will be back in the game IMO..

Honestly, this is not at all shocking. Yes, pc sales are slumping, but what do you expect with tablets and phones becoming more and more productive?

People just don't have the need, or itch, it upgrade to the newest pc. I feel as if its shifted towards the smart/slim mobile devices.

Anyways, its great for us consumers, not so much for some of these chip companies.

I think it will help them in more of a long term sense.. I don't think they will be making a ton on the hardware sales but it will increase their economies of scale to produce the APU's..

A huge boon for them will be about a year after the PS4 and X720 are out and all the new games are written for the 8 core APU's.. This will allow the top of the line games for the xbox and ps run are fairly cheap (~$600) desktops and will be optimized for them..

very excited for the future of PC gaming now that everything is x86