By Ian Sherr

(Reuters) – Advanced Micro Devices Inc may make some of its largest inroads into the fast-growing laptop computer market thanks to a new generation of power-efficient chips to be unveiled next week.

People familiar with the matter who work for AMD said the company’s latest microprocessors are expected to be included in 109 mainstream laptop models in the coming months, the company’s best showing during the crucial back-to-school sales season. Last year, AMD’s chips were available in 40 laptop models.

“This is the first time we’ve seen this much attention to our notebooks,” the source said, referencing the company’s laptop chips.

And while shifts in market share are yet to be seen, “typically more design wins dictates more sales,” the source said, adding the company’s offerings are growing steadily across the major PC manufacturers.

The perennial second-fiddle to market giant Intel Corp has struggled to gain market share within laptop PCs, which have outpaced the growth of desktop PCs in recent years.

AMD’s stock has underperformed Intel since the beginning of the year, losing 14.57 percent of its value, where Intel has gained 5.44 percent.

However, AMD’s stock more than doubled off its 52-week low of $3.22 to close Thursday’s session at $8.27 on the New York Stock Exchange.

GROWTH AND RECOGNITION

Early signs are that the new range of chips to be unveiled next week are getting positive responses from top PC makers due to AMD’s attempts to simplify its numerous offerings under its new “Vision” brand, as well as improved battery life and performance across the line, according to one of the sources.

In the first quarter of 2010, AMD represented 12.1 percent of worldwide mobile chip sales, according to IDC. Intel’s market share was 87.8 percent.

While AMD has been slowly gaining market share over the past year for both desktops and notebooks, its strength slipped in the lucrative server market, ending 2009 with 10.1 percent share compared to 13.4 percent in 2008.

Now, AMD says it’s focusing on the consumer segment, which is expected to fuel PC growth.

Latest figures from industry watcher iSuppli peg notebook PC shipments growing 25.5 percent in 2010, to 209.5 million units from last year’s 166.9 million.

The sources also told Reuters that all of the microprocessors in the forthcoming laptops will be matched with AMD’s chipsets — collections of chips that connect the microprocessing brain to other parts of the computer.

That means AMD can collect more revenue for each laptop sold than it can when its microprocessors are paired with chipsets from other companies like Nvidia Corp.

The PC makers expected to feature AMD’s new chips as early as June include Hewlett-Packard Co, Lenovo, Acer Inc, and Dell Inc, the sources said.

(Reporting by Ian Sherr; editing by Carol Bishopric)

(Originally published May 6, 2010 on the wire at Reuters News, here.)

By Gabriel Madway and Ian Sherr

SAN FRANCISCO (Reuters) – As Apple Inc gears up for the crush of customers expected for Saturday’s iPad launch, employees who staff its retail stores are just as curious about the tablet as the fans who will line up outside.

Apple store workers say they have yet to see or touch the iPad, even though the launch is just days away and they are being trained and encouraged to talk about Apple’s newest device with customers.

“We haven’t seen it; we never do” before a product is launched, said one employee, who asked not to be identified because workers are barred from speaking with the media. “Every store employee I know, including the managers, they haven’t seen it.”

With its notoriously secretive corporate culture, Apple is loathe to circulate any iPads among retail troops ahead of the debut. Even in-store Apple repair techs — known as “geniuses” — don’t yet know how to fix the gadget.

Since the iPhone launch in June 2007, Apple product releases have played out like concert tours, with fans sleeping in lines overnight and blanket media coverage that generates plenty of free advertising.

But amidst all the hype, the company’s ethos of secrecy extends from its corporate perch in Cupertino, California, to its component suppliers and its network of more than 200 U.S. stores.

“We did not see or hold an iPhone until an hour before it went on sale,” said a former Apple store employee. “We didn’t know much more about it than people asking us.”

Major products are usually unveiled by Chief Executive Steve Jobs at special media events, and most retail employees are kept in the dark until the devices are publicly available.

“There was really no word on anything,” said another former store worker of the iPhone launch. “We saw a video of the keynote, and that was basically all you knew.”

GUARDS AND DECOYS

The iPad is Apple’s most significant product launch since the iPhone. Starting at $499, analysts estimate Apple could sell from 850,000 to 1.2 million units of the 9.7-inch touchscreen tablet in the April-June quarter.

Apple’s U.S. stores will open at 9 a.m. on Saturday but the company has provided few details about the launch.

If the iPhone debut is any guideline, Apple will have guards and decoys in place to hold the iPad’s secrets.

At one store, Apple arranged to have two pallets arrive the day before the iPhone launch, placing one in the manager’s office and the other in the stock room, both under the watchful eye of security cameras. Staff said one was filled with iPhones and the other was a decoy to discourage nosy employees.

A former assistant manager at an Apple store was ordered to remain at work all night before the iPhone launch, and given strict directions that only managers were allowed to see the smartphone, right up until just before they went on sale.

“We were told to stay overnight to guard them, to make sure nobody broke in and got to them. It was all a bit insane, but it wasn’t really surprising at the time,” he said. “It did put me off a little, but then you would read about something being leaked and you realize why they did it.”

Retail employees are in many ways the public face of Apple, charged with spreading the gospel about the company’s products to tens of millions of shoppers every year. Store staff, including part-time workers, have to sign nondisclosure agreements and can be fired for talking to outsiders.

They are paid around $10 an hour for entry-level work to over $30 a hour for those who staff the “Genius Bars” where customers come looking for help.

Tech savviness is not necessarily the top priority when it comes to hiring, according to the former assistant manager. He said there was a running joke about “Gapple” because his store often mined The Gap casual wear retail chain for potential employees.

“We looked for people who were passionate about Apple, people who would be comfortable selling the product,” he said.

Employees get a 25 percent discount on iPods and Macs, but none for the iPhone. Employees said they have not yet been told whether they will get a discount for the iPad.

One of the former employees said Apple stores were a fun, upbeat place to work, despite the strictness over secrecy.

“I understand why they do it. They give you just a little bit of a peek, just to tease you,” he said. “It drives people crazy but at the same time it generates all this interest. It’s human nature.”

(Reporting by Gabriel Madway and Ian Sherr; Editing by Tiffany Wu and Richard Chang)

(Originally published March 30, 2010 on the wire at Reuters News, here.)

By Ian Sherr

SAN FRANCISCO (Reuters) – To get accurate projections for Intel Corp, Wedbush Morgan analyst Patrick Wang often finds himself hopping on a plane to Asia.

Wang — who normally crafts complex mathematical models and pores over financial statements — finds, in Intel’s case, it helps to use his fluent Chinese to gather information directly from its customers: top computer manufacturers in the Orient.

“They’re just such a large semiconductor company and to get color in terms of the overall scale, you need that,” he said.

Wang and many other analysts’ predicament may underscore why the world’s top chip maker has beaten expectations in six of the last eight quarters. More than 80 percent of its sales are abroad. Analysts estimate over half its revenue comes from less transparent markets such as China, Africa and India.

Many analysts rely on “channel checks” — surveys of vendors and distributors to gauge supply and demand — but Intel’s case is further complicated by the preponderance of “white-box” manufacturers in those emerging markets: local mass producers of unbranded computers.

Unlike more developed markets such as North America and Europe, where large computer manufacturers release regular sales numbers, many Asian, African and South American countries are dominated by smaller local players.

Intel estimates white-box outfits buy 25 percent to 30 percent of all the chips it sells each quarter.

On April 13, Intel is expected to post $9.80 billion in revenue, and earnings of roughly 37 cents per share, excluding items, in the first quarter of 2010, according to Thomson Reuters I/B/E/S.

“There are countries that analysts tend to overlook because you only have a finite amount of time,” said Real World Technologies analyst David Kanter. “It’s hard to get information there because you’re not going to go to Brazil to talk to a bunch of white-box vendors.”

Yet that’s exactly what many, like Wang, have to do.

RISING DEMAND, LOWER CLARITY

According to Thomson Reuters Starmine, an earnings surprise is likely in the first quarter. Starmine’s SmartEstimate, which places more weight on recent forecasts by top-rated analysts, predicts Intel will post earnings per share about 1 percent above the Street’s average projection.

Demand is rising for computers as more of the world comes online. But many of the Internet’s newest entrants are in locations remote enough that larger manufacturers haven’t yet established a presence, so their market is instead flooded with small generic manufacturers — the veritable black hole of sales into which analysts rarely see.

“It’s so diverse and there are so many different channel players in all different segments in so many different countries, and that’s what makes it complicated to put a sticker on,” admitted Maurits Tichelman, Intel’s director of channel sales.

Markets tend to become easier to read as the industry develops. Insiders at both Intel and Advanced Micro Devices Inc say consumers in developing markets tend to prefer white-box computers, but as their quality of life improves, so, too, does their hunger for portable devices.

Laptops tend to be the domain of major brands, so visibility into sales channels typically improve. Companies like Hewlett-Packard Co, Acer Inc, Toshiba Corp, Dell Inc and Apple Inc all report data that help analysts peer into Intel’s sales volumes.

But if multinationals don’t — or can’t — immediately move in, dominant local players rise instead. After all, Intel’s Tichelman said, Lenovo Group started as a local Intel partner in China; now it’s the world’s No. 4 computer maker.

IDC analyst Shane Rau said the sheer size of the Chinese market, and the country’s own efforts to build as many computer parts as possible within its borders, is leaving another opportunity for surprise.

IDC employs dozens of analysts on the ground, providing first-hand knowledge of the market. But if demand were to surge or drop abruptly, analysts could still miss it, he said.

“There are so many little channel players out there that it’s not entirely clear where all the processors are going.”

Hence Wang’s willingness to cross half the globe from his base in New York to Shanghai.

On a chilly November day in 2009, the 29-year-old sat in a taxi in bumper-to-bumper traffic, preparing for a meeting with product managers for several distributors and, of course, an appointment with Intel.

But even that may not be enough.

“There’s no way to get a good cross section of how those sales are doing,” he said. “You’ll never get a full picture of things.”

(Editing by Edwin Chan and Richard Chang)

(Originally published Sunday, March 28 on the wire at Reuters News, here.)

By Ian Sherr

SAN FRANCISCO (Reuters) – Stellar results from Intel Corp could signal brighter tech earnings results in coming weeks, but analysts warn stocks themselves may be stuck in a short-term correction.

Intel shares fell more than 3 percent even after analysts from Credit Suisse, Raymond James and JMP Securities, among others, raised their price targets on the stock. JMP Securities and Thinkequity raised their ratings to “outperform” and “buy” respectively.

The broader market was down on Friday as losses from JP Morgan Chase & Co helped drag the tech-heavy Nasdaq Composite down 1.24 percent.

Wedbush Morgan analyst Patrick Wang expected a short-term correction for Intel and many other semiconductor stocks as Wall Street locks in profits after a solid fourth-quarter showing from the world’s largest chipmaker.

“Buy on the rumor, sell on the news,” he said, adding that semiconductor stocks have had a good run when put in the perspective of downgrades from both Morgan Stanley and Merrill Lynch before Intel reported stellar earnings.

“There’s no rhyme or reason behind the weakness here except that expectations are up and people are taking profits,” Wang said.

(more…)

SAN FRANCISCO, Jan 12 (Reuters) – GlobalFoundries plans to merge its operations with recently acquired Chartered Semiconductor, creating a single contract chipmaker with more than $2 billion of revenue to take on market leaders TSMC and UMC.

GlobalFoundries, a joint venture of Advanced Micro Devices Inc and Abu Dhabi-backed Advanced Technology Investment Co, is already beginning to work with suppliers and partners as one company, GlobalFoundries Chief Executive Doug Grose told Reuters in an interview.

(more…)

By Ian Sherr

SAN FRANCISCO, Dec 4 (Reuters) – Graphics microchip maker Nvidia Corp is a company in transition.

The Santa Clara-based company halted development for one of its largest units in October, raising questions about whether the unit’s product sales would slowly tail off or sales would drop off a cliff.

And, if they did, could the company’s products in new market segments gain enough traction to make up the difference?

(more…)

MILPITAS, Calif. (Reuters) – The rapid proliferation of multimedia and Web-ready consumer devices such as smartphones is underpinning a gradual uptick in corporate spending and spurring growth for specialty chipmakers, the top executive at industry player LSI Corp said.

The company, which competes with the likes of Marvell Technology Group Ltd to make chips for computer servers and storage devices, wants to continue to hitch a ride on that wave of consumer devices by providing chips for network and data infrastructure, said Chief Executive Abhi Talwalkar.

“There’s richer content flowing through networks,” he said in an interview at LSI’s offices in Silicon Valley.

“Just the push of richer PDAs (handheld devices), and the growing mix of PDAs as a percentage of overall mobile subscribers — that in itself is driving tremendous requirements,” he added, referring to both network infrastructure and data storage for Internet-centric devices.

(more…)

SAN FRANCISCO, Nov 20 (Reuters) – Brocade Communications Systems Inc has pushed its fourth-quarter earnings release to three hours after the close of market on Monday, an unusual move that surprised some analysts and investors.

Most large technology companies report their results and hold their conference calls on the same day.

Analysts were left puzzled by the decision to post the results at 7 p.m. EST (2400 GMT), long after most U.S. traders have left the office. The company said its conference call with analysts will follow at 8 a.m. EST (1300 GMT) on Tuesday.

“They’ve never done that before,” said Robert Baird analyst Jayson Noland, adding that he declined to speculate on why the change had happened. “There are companies that do that every quarter but most don’t.”

(more…)

By Ian Sherr

SANTA CLARA, California (Reuters) – Intel Corp’s (INTC.O) chief financial officer said the chipmaker is on track to meet its fourth-quarter outlook and said a recovery in corporate spending on PCs could happen in the next 18 months.

“I think the ingredients are being put in place that will lead to a PC refresh cycle in large enterprises,” Stacy Smith told Reuters on Friday, adding that when the buying starts, it tends to include a lot of demand.

“The question is: is that the second half of 2010, is it 2011?” Smith, 47, said in an interview at Intel’s headquarters in the heart of Silicon Valley. “I don’t think anybody can tell you they know the answer to that question.”

(more…)

By Ian Sherr

SAN FRANCISCO (Reuters) – As Microsoft Corp’s Windows 7 release approaches, early reviews are generally positive. But so were reviews for Windows Vista just before its launch.

In the months leading up to Windows 7′s release this Thursday, publications from ComputerWorld to the New York Times have written favorable assessments, praising, in particular, its increased speed and compatibility with older computers.

But Vista got high marks before its release as well, with writers back then praising a new visual design — and glossing over quirks that later became common gripes.

“I was the editor of PC World at the time that review was done and yes, I wish in retrospect we’d held to somewhat a higher standard,” said former Editor-in-Chief of PC World, Harry McCracken, who now blogs on his own site, Technologizer.

After its release in 2007, Vista — which runs on roughly 20 percent of the world’s PCs made by the likes of Hewlett-Packard Co, Acer and Dell Inc — went on to become a roundly criticized and unpopular product, with many opting to stick to the aging Windows XP instead.

But to have read the reviews at the time, one would have thought Vista was certain to be a success.

(more…)