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A New Entry From A.M.D. in Chip Wars

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By LAURIE J. FLYNN
Published: September 10, 2007

Advanced Micro Devices is counting on a new high-performance computer chip to hold on to hard-fought market share it has won from its principal rival, Intel.

The company, based in Sunnyvale, Calif., is set today to release the next generation in its Opteron line of processors for computer servers. The new chip puts four processors on one piece of silicon, a technology known as quad-core, allowing for faster calculating and greater energy efficiency, features sought by companies running large data centers and server farms.

Mario Rivas, executive vice president for computing products at A.M.D., said the latest Opteron chip is the company’s most significant new product in several years.

For Advanced Micro, the stakes are high, with the new chip arriving just as it struggles to maintain its hard-earned gains from Intel, its far larger rival. A.M.D.’s product introduction comes less than a week after Intel tried to upstage it with a server update of its own: new Xeon server processors that bundle together two chips that each have the circuitry of two processing engines.

In July, A.M.D. reported a $600 million loss for the second quarter, its third loss in a row, as it grappled with the renewed competition from Intel and falling chip prices. But it also said that shipments of microprocessors rose 38 percent from the first quarter, and that it had begun to win back market share after several quarters of slipping.

Intel and A.M.D. have been locked in a race to deliver high-performing chips for several years. A.M.D. was first to market with a dual-core chip more than two years ago as Intel struggled to get its dual-core strategy off the ground.

When A.M.D. introduced the Opteron server chip in 2003, the industry was slow to warm to the product, but the company says that this time will be different. Four years ago, Intel’s server processors were favored by nearly all major hardware suppliers. But delays at Intel induced Dell, I.B.M., Hewlett-Packard and Sun Microsystems to gradually turn to the Opteron as an alternative.

A.M.D. gained market share, particularly in the desktop and server markets, though Intel managed to keep a tight grip on fast-growing notebook PCs.

In recent quarters, Intel has responded with a succession of processors, and has managed to win back some of the share it lost. Intel is now leading in the market for servers, analysts say.

Analysts expect the new Opteron to take off more quickly this time because the major hardware companies are already A.M.D. customers. “This chip will have a much faster impact on A.M.D.’s business,” said Nathan Brookwood of Insight64, a chip industry consulting firm, “but a lot will be riding on just how good it is.”

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WIRED) -- Two cable powerhouses have announced an ambitious pilot program that aims to convince their customers that, actually, TV on the web should not be free.
Jeffrey Bewkes, chairman and CEO of Time Warner, speaks at the NCTA conference in Washington.

Jeffrey Bewkes, chairman and CEO of Time Warner, speaks at the NCTA conference in Washington.

With a service called TV Everywhere, Comcast and Time Warner will give cable subscribers access to "premium" television content via broadband, and later cellphone connections.

To begin with, 5,000 Comcast subscribers will begin testing the system next month, giving them access to Time Warner's TBS and TNT channels on their computers, and the same channels' video-on-demand catalogs on their cable boxes.

If you made peace long ago with the idea of paying a monthly cable bill, this probably sounds great. It means watching your existing subscription on new screens without paying additional fees or buying more hardware. (Of course, as consumers adopt TV Everywhere, they can probably expect price increases.)

But if you prefer to watch your television for free on ad-supported sites like Hulu while paying only for the internet connection that delivers it, you could be in for a rude awakening. TV Everywhere represents an alternative -- and possible threat -- to the popular Hulu model.

If the pilot program impresses the group -- and proves to other networks that its user-authentication system is secure -- Comcast and Time Warner expect the other television programmers, ISPs and mobile providers to join, giving all cable subscribers a way to watch the content they pay for on their televisions using any broadband-connected computer or authenticated cellphone.

Already "at least 92 percent of Americans qualify to watch this for free online," according to Jeff Bewkes, chairman and CEO of Time Warner.

For these subscribers, TV Everywhere represents a potential win. The only question is whether they will keep paying for the old cable subscription model as their viewing habits shift online.

Don't Miss

There's nothing to stop television networks from putting their content on both Hulu and TV Everywhere, because TV Everywhere's contract will be non-exclusive, according to Bewkes. However, given the choice between Hulu and TV Everywhere, television programmers have an incentive to go with the latter.

Only the TV Everywhere model promises to port yesterday's lucrative business model onto today's platforms. And that, according to some critics, is exactly the problem.

"[TV Everywhere] raises substantial anti-competitive issues by restricting the availability of programming to the favored distribution methods," said Gigi B. Sohn, president and co-founder of the public interest group Public Knowledge. "Under the TV Everywhere plan, no other program distributors would be able to emerge, and no consumers will be able to 'cut the cord' because they find what they want online. As a result, consumers will be the losers.

"In addition, we are concerned that this program violates the open nature of the internet. By adding this additional toll lane, Comcast and Time Warner want to create their own 'managed channel' within the internet and turn the internet into their own private cable channel."

So, what about Hulu? Will its deals fall through given this new option?

"There will be some part [of Time Warner's content] that will be out there [on Hulu], said Bewkes."Short-form content, I think, will continue to be available -- promotional content will continue to be available."

However, only cable subscribers will be able to access other content online -- through officially licensed avenues, anyway.

Bewkes added that some other television programmers have avoided Hulu "for security concerns and because they didn't like the model," but that they will give TV Everywhere a chance.

"Consumers vote every single month with their pocketbook," he added. "They don't have to subscribe to cable. They don't have to pay for these services, yet they do. The number of people paying for subscription television has gone up and up and up every single quarter that we've been in the business." 

Unlocking the unlocked cell phone market

  • Story Highlights
  • Without hefty carrier subsidies, will "unlocked" cell phones ever crack the U.S.?
  • Up until recently, phones not tied to wireless carriers were only available overseas
  • Now manufacturers are selling them on their Web sites and in retail stores
  • Nokia and Sony Ericsson see opportunity in the U.S. market
 
July 3, 2009 -- Updated 2006 GMT (0406 HKT)
 
By Marguerite Reardon
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CNET.com

(CNET) -- Nokia and Sony Ericsson are targeting the U.S. with a new set of unlocked phones. But without hefty carrier subsidies, will they ever be able to crack the U.S. market?

Are American consumers ready for pricier cell phones that come without two-year wireless contracts?

Are American consumers ready for pricier cell phones that come without two-year wireless contracts?

There's no question that when it comes to features, Nokia and Sony Ericsson's new U.S.-ready phones can easily compete against the hottest new phones on the market.

Nokia's N97, a touch screen phone that supports both 3G and Wi-Fi, has a 5-megapixel camera and 32GB of memory. It's a clear competitor to the new Apple iPhone 3G S and the Palm Pre.

The Sony Ericsson W995a, also a 3G and Wi-Fi enabled phone, comes with an 8.1-megapixel camera, a brilliant display screen, a good media player and features such as stereo Bluetooth, and GPS. In terms of features and functionality, this phone could easily compete with other high-end feature phones like the LG enV3, which is sold by Verizon Wireless or the Samsung Memoir T929, sold for T-Mobile USA's network.

But even though these phones may have the features to compete, they're not sold through a wireless operator, which means that they are not subsidized, making them too expensive for most mainstream customers. The N97's suggested retail price is $700, and Sony plans to start selling the W995a for $600.

Meanwhile AT&T charges $99 for the 8GB iPhone 3G, $199 for the 16GB iPhone 3GS, and $299 for the 32GB iPhone 3GS. In exchange for the subsidy, AT&T requires that customers sign a two-year service contract. The price of the service, which includes voice and data services, is a minimum of $70 per month. But regardless of whether a device is subsidized, users will have to purchase some kind of voice and/or data plan, depending on the type of device they buy.

"In the U.S. market, price is a huge factor in determining which phones people buy," said Will Stofego, an analyst with the market research firm IDC. "Why pay $500 or more for a phone when you can get an iPhone for $100? Of course you have to agree to the two-year service plan, but I think that's a trade-off most consumers are OK with."

Don't Miss

Up until recently, unlocked phones--handsets that can be used on multiple carrier networks--were only available in "gray" markets where Americans bought phones from overseas. Now manufacturers are selling them on their Web sites, in their own retail stores, and through some big retail chains, such as Best Buy. Nokia has opened several retail stores in the U.S. And Sony Ericsson sells unlocked phones through Sony Electronic retail channels.

As part of their push to address the U.S. market, Nokia and Sony Ericsson are also making sure that the phones they sell in the U.S. operate in the frequency bands used by AT&T and T-Mobile, the two main GSM carriers in the U.S. While these operators have built GSM networks just like carriers in Europe and parts of Asia, not all GSM networks operate on the same frequency, which means that some unlocked GSM phones bought in Europe or Asia won't work in the U.S. on a GSM network.

Another benefit to buying a U.S.-friendly unlocked phone is that Sony Ericsson is now offering warranties for customers who buy their U.S. unlocked phones through a Sony retail channel. The company doesn't offer a warranty for phones designed for other countries and brought to the U.S. through the gray market.

Roadblocks for unlocked phones Despite these efforts to create a stronger retail presence for these unlocked phones, the market remains small. In the U.S., only about 5 percent of the phones sold each year are unlocked and available from somewhere other than a carrier. This differs greatly from other markets. Worldwide, unlocked phones account for about 50 percent of phones sold. In Asia, about 80 percent of cell phones are sold independently of a carrier. And in Europe, roughly 70 percent of cell phones are sold unlocked.

There are several reasons for this difference. For one, two of the four big nationwide U.S. cell phone operators in the U.S. use CDMA, which does not use SIM cards that can be interchanged between phones. Most of the world's cell phone carriers use GSM, which does allow for SIM cards. And because people buy unlocked phones in order to swap out SIM cards to use on other carrier networks, phones made by manufacturers such as Nokia and Sony Ericsson, which have concentrated efforts on developing GSM phones, can only be used on two of the big four nationwide wireless networks in the U.S.: AT&T and T-Mobile.

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