AMD shines in Indian PC market

While the Athlon’s made it in the home and SOHO segment and AMD has the first-mover edge in getting a 64-bit processor to market before arch-rival Intel, CIOs are more interested in reliability and price. It’s not going to be an easy fight but AMD has a shot at getting a 20 to 25 percent market share in the commercial segment by 2005, says Prashant L Rao

While Sanjeev Keskar and team have done a great job to bring AMD India to its current position, the road ahead will be even tougher

Almost every eighth desktop processor sold in India in Q3 2003 was an Athlon. That’s impressive when you consider the roller coaster ride AMD India’s been on during the past two years. The Athlon started off with a bang in Q1 2002 but sales were hit badly during the initial Pentium 4 ramp up. After six dry months (Q2 and Q3 of 2002), the Athlon roared back and it was the turn of Pentium 4 and Celeron sales to dip in Q4 2002. 2003 saw both the Pentium 4 and the Athlon doing well. The Athlon overtook the Celeron in Q4 ’02 and after losing ground in Q1 it has beaten the Celeron in Q2 & Q3. (Source: IDC).

Finding a gap

Today, Intel offers buyers the Pentium 4 and the Celeron but market statistics reveal that the bulk of Intel’s sales are of the Pentium 4 (by an 8:1 ratio favouring the Pentium 4). The Celeron is being soft-pedalled and is underpowered in terms of L2 cache (The Celeron has a 128 KB Level 2 cache vs. Pentium 4’s 256 KB L2 cache—and for 2 GHz and faster Pentium 4s that’s shot up to 1 MB on the 2.80A and later Pentium 4s). This leaves a gap in the price-performance equation and that’s where the Athlon has found a home, particularly in the home and SOHO segment.

Pentium 4 2-GHz desktops from GIDs are available starting from Rs 19,990, but for that price you can get an Indian OEM brand Athlon-based PC.

Today, Athlon-based PCs are bought by professionals (graphics, multimedia), avid gamers and students. HCL’s Athlon-based PCs are targeted at home, SOHO, small business and educational institutions. That said, there’s nothing but perception stopping the Athlon from making it onto business desktops. “While running Office applications the Athlon is on par with the Pentium 4,” says S Rajendran, general manager-sales and marketing, Consumer Product Group, Acer India.

Though the market perception is that the Athlon comes somewhere in-between the Celeron and Pentium 4 in terms of performance, OEMs believe otherwise. For instance, Acer has a Pentium 4 2 GHz notebook with a CD-ROM drive and modem/LAN connectivity that sells for Rs 49,999. Its mobile Athlon-based notebooks are priced higher than that and these ship with all the bells and whistles. The lowest priced Athlon notebook from Acer is the Aspire 1350, powered by a mobile Athlon 2400 and fully loaded with a DVD/CD-RW combo drive, 256 MB RAM and a 20 GB hard drive. Pre-budget, this model was retailing for Rs 59,999. Post-budget, it’s going for Rs 54,999 with a 30 GB hard disk. All of which means that the Athlon has a very strong performance story.

Building the ecosystem

Initially, AMD had the motherboard blues. The lack of availability of right motherboards and heat sinks for the Athlon led to assemblers supplying PCs that did not perform as they should have. This led to the perception that the Athlon heats up. “Assemblers were compromising on the heat sinks to save Rs 1,500,” says Sanjeev Keskar, country manager, AMD Far East (India).

In 2003, AMD changed all that by putting a strong channel in place and ensuring that assemblers knew what motherboards and heat sinks work best with an Athlon. Consequently, Athlon-based desktops work just fine today. The company rolled out its ‘Processor in a box’ campaign in the final quarter of 2002. “We took control of the processor, heat sink and cooling fan,” says Keskar.

Going corporate

This year, AMD is going after the corporate and government markets. AMD India will go after the commercial desktop segment, leading with the Athlon and Athlon 64. The company has already found its way into accounts such as Sify iWay, Wipro Technologies, the Indian Army, IISc, IIM-B, the Tata Group and six state governments. “Our direct team is also focusing on corporate customers who have a preference for AMD CPU-based PCs,” says Rajendra Kumar, vice president-Operations, HCL Infosystems.

“The enterprise market is a totally different ball game requiring a very different kind of a channel, system integrators with multifaceted skills and a totally new go-to-market strategy and organisational preparedness not just in India but worldwide (e.g. just getting the TPC benchmarks right can be a Herculean task). Doing well in home/SOHO is no guarantee for success in the enterprise market but at the same time it is also not a handicap. Pure price play-based success in the home segment may not be adequate for the enterprise market,” says Sameer Kochhar, CEO of Skoch Consultancy. AMD is going to have its work cut out convincing CIOs that it is a viable alternative to Intel in the commercial desktop space. Its partnerships with leading Indian OEMs will help it here.

Gunning for a quarter-slice

There’s no reason why AMD shouldn’t be able to match its global performance, where it has historically held 20-25 percent of the processor market, in India as well. “Basically, when you are fighting a very significant presence like Intel with years of head start and huge infrastructural investments you also need to make proportional investments. Whether it is in the number of people, organisational set-up, marketing spends, support infrastructure, etc, it would require a significantly higher degree of investments. The initial ramp-ups against Intel from the AMD side were pretty impressive largely due to the great work done by Keskar and team. How seriously does AMD Inc. view India in the long term is what will determine the rest. At the current rate we have given them till 2005-end to double their market share of 2002,” concludes Kochhar.

The hottest chips on the planet

While the Athlon XP is going to remain AMD India’s mainstream processor for the next two years, the Athlon 64 that’s slated to take over in mid-2005 is the only 64-bit PC processor on the market. Today, the Athlon 64 is aimed at gamers, multimedia professionals, government design labs (engineering), institutions (engineering colleges) and animation companies. SuSE Linux for the Athlon 64 is already out. Microsoft is coming out with 64-bit Windows in Q3 this year. However, AMD is on the 130 nanometer process. Intel’s already made the shift to 90 nanometers with Prescott. AMD is teaming up with IBM to drill down to 90 and eventually 65 nanometers. There’s a 64-bit Mobile Athlon too though there are no notebooks based on this available in India at this point of time. While AMD has led the 64-bit charge, Intel has gone the multi-threading route. Though Intel has announced that it will go 64-bit with the Xeon, it is waiting for more software to become available before it goes 64-bit on the desktop. In the short term, Intel’s response to the Athlon 64 has been the Intel Pentium 4 processor Extreme Edition, a hyper-threading (HT) 3.2 GHz chip with a whopping on-die 2 MB Level 3 cache and a 800 MHz system bus. The larger L3 cache lets the processor pre-load graphics or video frames, which means better game play and image or video editing. HT makes a Pentium 4 look like two processors to software that incorporates instructions which take advantage of this feature. It doesn’t provide a 2x boost but applications such as Photoshop and some games do speed up by as much as 25 percent. HT is available on both Northwood (the older 130 nanometer Pentium 4s) and Prescott (the latest 90 nanometer Pentium 4) cores.

prashant@expresscomputeronline.com