 "Ravi Swaminathan")
According to the latest IDC PC Tracker report, AMD India has logged a market share of 32.6 per cent June quarter, the highest ever for the firm in India. Ravi Swaminathan, managing director, AMD India tells Abhik Sen about the company’s plans. Edited excerpts:
How has the Indian market expanded? What chunk of the global market share does it account for AMD?
Let me take the second question first. According to IDC, AMD probably has among the best market shares in the world in India. So clearly from AMD’s perspective, India is a high-focussed market. Some of the things happening here could be of relevance in other emerging markets also as the market evolve.
The growth has been propelled by the commercial notebook segment, where AMD’s market share has augmented almost 10 times in the last one year, from 5.62 per cent in Q2, 2012; to 54.01 per cent now. AMD has also increased its market share in the consumer desktop and notebook segment to 16.45 per cent and 14.95 per cent, respectively, for an overall year on year growth of 82 per cent or almost twice the market share from Q2, 2012.
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In reply to your first question, there were a few things focused on in the past few years. In terms of the commercial segment, AMD has always been strong. We go and talk to a CIO (chief investment officer) and in a sense, it becomes one discussion. It is more effective than spending millions of dollars in advertisement as the CIOs understand technology.
So most of the large govt undertakings and companies in the sectors such as banking finance, call centres, ITeS (information technology enabled services) services --- AMD has a large presence in the commercial and enterprise segment.
The second one is the consumer segment – historically we have been more popular with geeks, but we weren’t a mass product. As the accelerated processing unit (APU) came in we were able to redefine the market. It wasn’t about the price, but the value proposition which brings to you with what we could do with the CPU(central processing unit) and GPU (graphics processing unit). The APU has been a huge success.
How has the year-on-year growth been?
Pretty solid. Fifty-60 per cent. The notebook market has also eveolved.... first in terms of graphics and a lot of OEMs (original equipment manufacturers) are carrying AMD... so channel partners and OEMs say they offer a differentiated sector. The beauty of AMD is we have fewer SKUs (stock-keeping units), but each SKU counts.... the way it is with Apple. We are looking at fewer products.... maybe 20 per cent of our products will sell 50-60 per cent in terms of volumes.
For example e-tailing is an exciting segment as is large-format retail. We were negligible at one point, but we command a big chunk now.
The race was first about clock speed, then it was cores. What next?
The market is moving away from a lot of these jargons. Nine out of 10 customers don’t really understand what is core what is Ghz... it doesn’t really matter for the product. But that is how the industry was driven historically. I think the industry is changing and people are more and more – particularly as smaller devices are coming in – what can the product do for me, that becomes much more important. The totality of the experience you’re getting from the product and that experience, I would say, is more important than any of these buzz words --- six-core or eight-core.
AMD probably has the best number of cores, it probably has the highest speed and best graphics cards... we’ve got all that fastest Guinness Book of Records. But while we do that, for more and more customers it’s about the total experience... and you’re going to see that changing and its going to be less about the processor... A processor will be a good part of the product but it really will be about the total experience, which is a finished product, and that is the way it should be.
We now have an AMD-powered console. Are we looking at phones and tablets powered by AMD in the near future? Are you making a plunge into SoCs?
It’s a good point you raised because everybody today, be it NVIDIA, Microsoft and Nintendo, the whole ecosystem has moved to AMD. It really allows us to be working closely in terms of driving the whole ecosystem of gaming. That is a very big thing today because what it really does is it allows AMD to become in a sense the de facto standard. There are a lot of benefits to it — both for the customer as well as AMD. That is something very good.
Our CEO made the comment that 40 per cent of our business would really move away from what we call the standard PC kind of product and move into something called semi-custom. Keep your IP but you bring a box of IP and customise it to each individual.
So that’s a direction the company has taken. Gaming is the first proof point and we have already reached about 20 per cent. Our commitment is to take that to 40 per cent by the end of next year. That is something which is very clearly happening.
Part of the story is around tablets. Certainly tablets are an area of excitement for us. So yes, we are in the tablet game. But the key point for is that what is the differentiation which we bring to the tablet market.
NVIDIA has the Shield, a dedicated gaming device. Is AMD also planning something on those lines?
Let me put it this way, AMD’s philosophy has always been that we work with customers – and we work with OEM partners and other partners so that we can jointly bring products to the marketplace. They actually are the people who make the devices and we work with them.
Once chip manufacturers start trying to take over the end-user customer, then you’re competing with people to whom you are selling. And that’s not a very good thing. A lot of people asked why don’t you go heavily like Intel? We always said that is not our philosophy. Our philosophy is what is inside, stays inside. We want our OEM partners to win – whether it be Microsoft or Sony. Because if they win, we win.
So we are not in the gaming business as such. We work with people so they bring devices to the market. They give the whole experience but we are partners. AMD’s strength is that they are better partners.
What about your low-power products? Many more to come?
Absolutely. The Brazos was a huge success.... and a lot of work for Brazos was done in India, so we have a special affinity for it. Brazos is a major success for us, and now we have Brazos 2.0 which is doing extremely well. The next range is called Mash, with even lower power consumption. The key is to have lower power consumption but not at the cost of the experience. We will continue investing and bring new products.
At the retail level, do you think stockists need to be educated?
That is a challenge and because of that challenge, we have just 33 per cent of the market. But it’ll take time. But it’s happening by slower word of mouth.
Our sense is that the tipping point will come in 12-18 months. The market creators the 20 per cent have got the point, but the rest 80 per cent who follow, they are the challenge. Now in consumer segment, out of every three, one is AMD. In the commercial segment, of the two customers, one buys us.
A lot of what is happening is that more and more youngsters are interested in AMD as they’ve done their homework. So the generational shift helps.
What about AMD graphics cards? What about the mid-range segment?
Our market share in graphic cards, in the desktop segment, we have 40 per cent. We’re moving from the low-end and high-end segments. The middle segment is what we’re working on that’s a focus area... we had 15-20 per cent and now we’re 40 per cent.
In the OEM segment we have a bigger market share. A lot of people felt that with APUs, what will happen to graphics cards. But people still want a dedicated graphics card despite using an APU . Our challenge was how to make more and more laptops go with dedicated graphics cards.
So there is no danger to the graphics card market because of APU?
The APU is the sampler, when you see what the graphics processor can do, people would then feel the need for a dedicated graphics card.
