Staying alive!
AMD LIVE! is AMD’s digital home brand. It hopes that by being associated with the convergence between the PC and consumer electronics worlds it will not only sell more of its own products, but also give the channel desperately needed margin opportunities.
Intel had a go at the digital home with its Viiv platform but, having struggled to capture the public imagination, seems to have put it on the back burner, at least for now. So this could well be one of those battles AMD can win and, with the channel well suited to the kind of ‘solution sell’ required for a digital home proposition, it could be a double win.
“We have observed a trend towards channel splitting, in which the big guys continue to gain but the smallest retailers and resellers are holding their own because they’re diversifying and exploiting local connections,” he says. “Digital home products are good for smaller outfits as they provide good margin and require a personal, consultative approach to be sold properly.
The rhythm of the channel
“We want to help smaller outfits to display digital home offerings well and to become more proficient in selling higher margin items such as service contracts. One of the really nice things about AMD Live! Is the possibility of offering business-type maintenance contracts to consumers," continues Baker.
"If you put a digital home installation into someone’s home you can put maintenance contracts in and go back in six months time and make them aware of new possibilities.”
I ask Baker what other measures AMD has put in place to help the channel. “We have also been aligning our marketing activity to the rhythm of the channel business, as opposed to the rhythm of AMD’s product introductions.
“So for instance we’ll put a marketing programme that is much longer and has more long term assets in it. Then, as new products come in, we’ll introduce them into that campaign, rather than creating a new campaign every time a new product appears.
“Another example of how we’ve refocused on the smaller guys is our online RMA service. It used to only be available to our top customers but now it’s opened up to everybody. So now, if you have a problem with a processor, instead of going back to the distributor and going through some lengthy, uncertain RMA process you can phone up or go to our website and immediately get a replacement. That scheme also applies to a wide range of our partners’ motherboards too.”
Everyone benefits from competition
It’s great to hear AMD sounding so positive about its direction. I’m sure I wasn’t alone in wondering what its overall strategy was last year, but there has clearly been a lot of soul-searching going on at AMD and it may be starting to bear fruit.
AMD is in a pretty much unique situation in the technology sector in that everyone has a stake in its survival. Competition is vital as the driver for innovation and value and without AMD what incentive would there be for Intel and NVIDIA to try as hard to increase performance and reduce price?
Furthermore, given the attention Intel is currently receiving from regulatory bodies around the world, I don’t think it would feel at all comfortable if it were robbed of its only real competitor.
So HEXUS.channel will be following AMD’s renewed emphasis on AMD LIVE! and other, yet to be revealed, winnable battles with keen interest. Stay tuned for more instalments soon.
