It's much easier for the company to sell AMD-based PCs in Japan than in the United States, says Tom Bernard, Fujitsu PC's director of strategic product planning. "In the U.S., you have to sell Intel Celeron- or AMD-based PCs at very low prices," Bernard says. Fujitsu PC's LifeBook S2000 notebook, which starts at $1,200, already ships with an Athlon XP-M mobile processor. "In Japan, however, you don't have to practically give them away. The Japanese aren't as hooked on Pentium as the U.S. is."
Fujitsu PC isn't confident it can sell Athlon 64-based PCs in the United States at a profit. "The Athlon 64 is a pretty cool product, but it's not a cheap chip," Bernard says. "People in the U.S. aren't used to paying Intel prices for AMD chips."
Although AMD isn't the first to offer a 64-bit PC processor--Apple's 64-bit Power Mac G5 debuted in August--Athlon 64 will have the Windows PC market to itself for a while. Rival chipmaker Intel has yet to make a firm commitment to a 64-bit PC chip.
Northeast Utilities, which supplies electric and gas service to about 2 million New England customers, this year has replaced 1,000 Intel-based Dell PCs with Hewlett-Packard D315 and D325 PCs running Athlon XP processors. The utility is planning to deploy another 1,000 Athlon-based PCs by the end of 2004, a move expected to save Northeast $1 million over the two-year implementation period. Director of IT Ed Peczynski says he and his staff have looked at prototype PCs running Athlon 64 and like what they see. Still, the utility isn't ready for 64-bit desktop apps yet.
The real appeal of Athlon 64 at this time is its strong performance running 32-bit apps, with its capacity to handle migrations to 64-bit apps, Peczynski says. Data encryption, graphics design, and engineering apps are the most likely to take advantage of 64-bit processing today. "Sixty-four bit will become the desktop standard once the software is rewritten to take advantage of it," he says. "But it's still a few years off."
Athlon 64's backward compatibility with today's 32-bit apps is the right strategy for getting customers, independent software vendors, and developers to begin their inevitable migration to 64-bit, even if that market doesn't really take off until 2005, says Richard Heye, VP and general manager of AMD's microprocessor business unit. In the meantime, Athlon 64-based PCs will appeal to video-game designers and engineers best positioned to make use of the faster speeds. The market needs to see a "confluence of things, including software compatibility, 64-bit compatible operating systems, and developers' tools," to succeed, Heye says.
Athlon 64-based PCs, which will ship with Windows XP as their operating system, will provide a less expensive alternative to workstations for graphics-intensive applications used by smaller companies, Heye says. He adds that AMD is working with Microsoft to speed the development of its 64-bit Windows desktop operating system, scheduled for 2005.
What's kept AMD from winning business in the past has been a lack of top-tier computer makers using its products, price cutting by Intel to preserve market share, and a lack of applications ported to AMD's platforms, says Kevin Knox, AMD's director of enterprise segment marketing and business development for North America. What's going to help AMD win business is Athlon 64's superiority as a 32-bit processor and its ability to protect the customer's investment over a longer period of time, he says.
What will ultimately determine Athlon 64's fate is the company's ability to convince buyers that Athlon 64-based PCs are worth the price, says Paul Moore, director of marketing for Fujitsu PC's commercial and consumer products. "AMD has to have the stomach to stick with a good price margin and not discount heavily."