Dell Rejiggers Distribution for Athlon and Opteron Machines

Published: February 12, 2008

by Timothy Prickett Morgan

There is a bit of a hullabaloo in the PC and server markets as Dell, which came too late to the Opteron party for Advanced Micro Devices' X64 processors to do it much good, seems to be backing off on Opteron and Althon machinery.

Both companies are trying to recover from some stumbles in the past year. Dell was losing market share in PCs and servers, predominantly to Hewlett-Packard, but seems to be on the mend now that founder Michael Dell is back at the helm. Two weeks ago, Dell said that it was closing 140 kiosk locations in the United States, which allowed customers to lay their hands on Dell products before they buy them. Now Dell is moving to a much broader--and unconventional by Dell's historical direct Web and telephone sales model--retail distribution channel, which will allow the company to sell laptop and desktop computers through 10,000 retail outlets worldwide. (These are not Dell locations, of course, but shelf space at other PC retailers.)

There were some reports in the press late last week that Dell had also decided to stop selling computers based on Athlon and Opteron processors through the www.dell.com online store, but these reports are not true, according to statements released by AMD and Dell.

Here is the AMD statement on the matter:

"Today, you may have seen inaccurate reports that Dell is no longer selling AMD processor-based systems on Dell.com. Both AMD and Dell want to ensure that our customers understand these reports are untrue. AMD and Dell continue to enjoy a strong partnership and AMD is pleased with the growth ramp we are experiencing with Dell. Dell indicates it sees significant growth opportunities in retail with AMD, and is in the process of redistributing its product mix as it does from time-to-time. In addition to several AMD-processor based Dell notebooks and desktops now available in retail, consumers and businesses may purchase AMD-based desktop and notebook systems on Dell.com, as well as a wide range of AMD-powered server solutions via Dell.com as well as its other direct channels."

And here's what the Dell statement on the matter is:

"To ensure we deliver the best value to our customers, Dell regularly adjusts its product offerings, and how customers can purchase those products. Currently the majority of our consumer AMD-based systems are available through our retail partners such as Wal-Mart, Best Buy, and Staples, and through telephone sales. Dell also sells a range of AMD-powered business notebooks, desktops and servers online. Certain product ranges or models may only be available through specific channels such as retail or phone. We are committed to the AMD product lines as a long-term partner to provide the maximum choice for our customers."

If you go to the Dell.com site, you can see that the Inspiron 531, Latitude D531, Dell Vostro 1000, Inspiron 1501, and Optiplex 740 PCs and the PowerEdge 6950 servers are still available online from Dell.

It is safe to speculate that Dell was hoping to be able to bring quad-core Athlon and Opteron processors to bear for some kind of competitive edge in the PC and server space, and that AMD's cache bug in the Phenon Athlon and Barcelona Opteron chips have not helped Dell. But other vendors, particularly Sun Microsystems, have been hurt more by AMD's delays, which is why Sun is now buddy-buddy--as Dell has always been--with Intel, which has its quasi quad core act together right now like crazy after years of stumbling on 64-bit memory extensions and multicore designs. It is always a good idea to have at least two suppliers for a part, and Dell has learned this lesson. Whatever great discounts on parts it got from exclusivity with Intel all those years were negated mightily in the past two years as Dell missed the Opteron party when the Opterons were trouncing Intel's Xeons. Dell will not make that mistake again--not if it is smart, anyway.

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