One of America’s funniest comedians was a fellow named Rodney Dangerfield whose one liners where legendary but his funniest lines almost always started with “I get no respect.” The folks from AMD know just how he feels. For years, they felt that they were on par technologically with Intel and, in many cases, had even better technology, but the industry gave them no respect. But that perception seems to be changing. Their thrust into 64 bit computing that allows for backward compatibility with 32 bit apps is starting to catch on, and the last major hold out on adopting AMD chips, Dell, has finally admitted that AMD’s chips are really good and that Dell will soon be using them in their servers and computers in the coming year. Even more interesting is the fact that Intel has concluded that AMD was correct in creating a 64 bit platform with backward compatibility to 32 bit apps and is now scrambling to follow in AMD’s footsteps.
Add to that Intel many blunders over the last year and all of a sudden, AMD looks good to a lot of customers who spurned their advances in the past.
I recently met with AMD officials at their annual analysts briefing and was pleasantly surprised to find that their 64 bit chips are finding their way into all types of servers and applications. They are especially being welcomed in engineering and scientific applications and at the event, officials from Ferrari’s racing team showed how AMD’s high speed 64 bit processors gives them an edge when it comes to designing Formula One race cars. While I am encouraged to see them make serious strides in the industry and gaining acceptance even from folks like Dell who have been long time holdouts, for them to really be successful, they need to see more software vendors supporting 64 bit apps as well as Microsoft speeding up their development of a 64 bit OS that supports this new computing platform.
Although AMD’s advance in high speed computing is important and exciting, there is another product that they showed that I am even more excited about.
For many years, I have been a major proponent of creating a very low cost computing platform that could be used to bring poorer and developing nations into the information age. Last fall, AMD introduced a product that I believe is very important in the quest to bring the rest of the world into this digital age. The product is called the Personal Internet Communicator (PIC) and with keyboard and mouse, it sells for $185.00.Add a 15 inch monitor and the total cost of the package is $285.00. This is not a high powered computer by any means of the imagination and uses only an AMD Geode 500 MHz processor and has a puny 10 gig HD and basic 56K modem. However, to people in India, Mexico and other developing nations where their yearly incomes are extremely low, this computing device is a God send. AMD’s first major partnership for the PIC is Tata in India, which is a $15 billion dollar technology company that will handle the selling and distribution of these systems within India. AMD says that they will soon have partners in Mexico, China and other countries where this type of computer will be attractive due to its bare bone pricing yet real world Internet connectivity and PC functionality.
The PIC marks what I consider a serious milestone for the PC industry. At Comdex in 1999, just as the PC industry was really discovering the value and potential of the Internet, Oracle CEO Larry Ellison and a telecom partner, held an unscheduled press conference to announce what he called the “Internet PC.” He argued that the PC itself was too expensive and too hard to use and that what was needed was a low cost system that had a connection to the Internet. And, more importantly for him, he was going to be the one to champion this concept and get the Internet PC out so even developing countries could afford to be a part of the information age. At the time, the median price of a PC was about $1700. But an interesting thing happened after Ellison complained about PC pricing and its lack of affordability for use and adoption in developing countries.
The PC industry started to squeeze their own margins and beat suppliers down on costs and within two years, they had fully loaded PC’s out the door for under $1000. And since then, prices have continued to slide, so much so that Ellison’s own quest to create a sub $500 PC with only Internet connectivity was squelched altogether. He also made two assumptions at the time about the Internet PC that turned out wrong. He believed that high speed connectivity was just around the corner and that would mean that applications could reside on the Internet and not on the PC itself. Consequently, he also concluded that there would not be any need for local storage since all applications and info would come directly from the Internet. Well, it turns out that we are still years away from ubiquitous broadband and, in some developing nations, they don’t even have telephony connections. But there are at least another 2 billion people in the world that, although they have low incomes, could find away to buy a PC that is at this price point and thanks to even a basic modem connection, can be brought into the digital age and reap the benefits of the Internet with its links to information and communication.
With that in mind, the PIC from AMD and their partners, which include Microsoft, Samsung, Seagate and others, is well on the way to help them in their quest to create what AMD calls their “Global Planetary Computing” platform.
There is another twist on this low cost concept that could be even more powerful in the future. The PIC is a great entry level device and I believe will be successful within the markets AMD is targeting. However, there is another school of thought that says that there will be a device that sits next to the TV and yet has all the functionality of a PC. But, the missing link is a DVD playback system that is not in the PIC as of now. The reason that this is important is that it could potentially become not only a person’s gateway to the Internet but could also become their digital entertainment system. Of course, in higher income markets this device could take the form of a game system or even a next generation set top box, but there are companies developing a device that has been dubbed a “digital entertainment center” and while it does get info and data from a PC to display on a TV, its real purpose in life is to become the hub of a person’s digital entertainment experience. A recent announcement of a partnership that includes, Zoran, Transmeta and Zedeon is proposing such a system. Although aimed at American and European markets at first, this sub $400 product includes a DVD, PVR, 40 gig HD, audio subsystem and X86 based OS and consumer user interface that is optimized for a TV. While clearly an up market device now, at this price, it could be attractive to even markets like China and other parts of Asia where DVD’s are an important part of a family’s entertainment experience today. And if the TV is the monitor, its sub $400 cost is not that far off from the $285 PIC with even more value being provided to the final customer. The bottom line is that the activity of creating a low cost PC or PC derivative for the under-developed world is now in full swing and the potential of bringing billions of more people online may be a reality sooner then many think.
http://www.csinsights.com/index.php?action=pg_article&id=54
