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AMD Adds Lenovo To Commercial PC Strategy

AMD has done pretty well peddling servers for business and hopes the Lenovo deal will improve its market share on the business desktop.
AMD plans to announce Tuesday that it cut a deal to include its chips in Lenovo PCs, part of the company's overall strategy to compete with Intel for business users.

"Each [PC vendor] announcement we make serves to increase our footprint in the large business and enterprise market, and gives us another 'at bat' that we did not have previously," says Bob Brewer, corporate VP of AMD's desktop division.

Lenovo on Tuesday will introduce the ThinkCentre A60, a desktop platform targeted at the commercial enterprise market that uses AMD's Athlon 64 X2 dual-core processors. AMD is currently the largest provider of processors to Lenovo for consumer PCs sold in China, and AMD chips power many Lenovo PCs worldwide.

AMD has already been successful getting its processors into enterprise datacenter servers, but its penetration on the enterprise desktop is tenuous.

AMD's market share of x86 processors for server applications grew to 25.9% in the second quarter of 2006, according to Mercury Research, up from 22.1% in the first quarter. AMD hopes to repeat that enterprise success with clients.

According to Gartner, AMD in the second quarter had 25% share of all x86 processors shipped into the desktop PC market. But that share is skewed heavily to the consumer market, where AMD has a 32% share. In the commercial market, AMD currently has only an 8% share.

"We haven't had the stability and longevity that enterprise customers are looking for compared with the strong legacy our competitor has in that market," Brewer says. "But with the tremendous success of Opteron ... [IT executives] feel much safer now in bringing AMD into the enterprise for the client space."

The commercial PC battle for AMD has been one platform at a time, Brewer says. With the addition of Lenovo on Tuesday, virtually all major PC makers now offer an AMD-powered PC specifically targeted to business users, including Hewlett-Packard, Acer, and Fujitsu-Siemens.

The only major PC vendor not to offer at least one commercial PC platform using AMD processors is Dell, which also represents one of AMD's best opportunities for growth.

Dell announced it is breaking from its long-standing Intel-only policy and will introduce a server based on AMD's Opteron by the end of the year. To date, Dell has not indicated that AMD-based PCs are also in the works.