Tomahawk, WI 8/06/2013 (Basicsmedia) – Advanced Micro Devices, Inc. (NYSE:AMD) has been going through a very trying moment in the recent past. This has been necessitated by the fact that the industry as a whole hasn’t benefited a lot. The industry has been experiencing a lot of pressure from several quarters including the fact that Apple has introduced the iPad, which has seriously eaten into the shares which products made by companies such as AMD and Intel enjoyed in the past years. AMD has survived in this industry mainly because of the good chips it made, but which were sold on prices which favored those with tight budgets.

Challenges Facing AMD

AMD is facing a huge fight on its hands. It has to fight for a share of the market with companies which are making tablets. This is because many of the clients AMD used to rely on to survive, have shifted their attention to buying tablets which they consider to be more flexible and well able to meet their needs. As the demand for PCs weakens, companies such as AMD are forced to see a huge fall in their revenue, and profitability hence causing more worries to their investors. Revenues and net incomes of these companies are on a decline and this is a worrying trend which needs to be reversed quickly before it worsens.

How Is AMD Evolving its Operations?

AMD has been forced to look at other avenues it can use to improve its revenues and net incomes lest it collapses and is no more. It has seen it best to diversify and go into other markets which it had never thought of being part of. Currently, the company has seen it fit to start making and selling chips for gaming consoles of both Sony’s and Microsoft’s PlayStation 4 and Xbox One respectively. As long as this market can be satisfied and serviced properly, the company should be able to make up for the lost revenue which it has experienced as a result of the decrease in PC sales.

AMD’s solutions, which are still considered to be much cheaper than those of other companies, may yet, prove to be quite profitable. What it charges for its PC processors is considered to be fitting for the lower end of this market, especially among people with limited resources. However, the reduced sale of PCs has ensured that its costs of operations have also gone down. This has created a scenario where AMD’s net loss has shrunk considerably from a high of $590 million, to settle at around $146 million, according to the financial results which were announced recently.

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The image shows AMD and other leading MPU Suppliers sales, for 2011 and 2012.

The image is courtesy of www.siliconsemiconductor.net

What Is My Take?

AMD is on the right path in terms of market or product diversification. It has noted a problem and is seeking to address it creatively to ensure that it remains afloat. If AMD had opted to continue with the manufacture and sale of PCs like it had done since it was created, I would have asked everyone holding is stock or shares to get rid of them quickly, since tablets are being bought in larger numbers compared to PCs. Based on this development, I would ask investors to hold on to their shares and see how the market will respond later before deciding to sell, or buy more. It has an edge over its competitors.

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