The internet has created a huge change in businesses and in this time of tectonic economic shift, technology companies, still playing by the old rules, are destined to falter. But some companies are great at forecasting technology trends and the $6.57 billion, 11,705 employees-strong, Sunnyvale, California-based AMD is at the forefront, both as a thought leader and innovator in the field of personal computing. Top management at the semiconductor design innovator is increasingly banking on the lucrative Indian PC market for revenue growth; this is particularly true given slow economic growth in the US, Europe and Japan.
AMD management believes that India offers a strong growth and value story. The potential in this market is huge with around 80 million households yet to buy a PC. ?It?s a country we are optimistic about,? says Ravi Swaminathan, managing director and regional vice-president of sales and marketing for AMD India. ?The PC market growth is driven by high broadband penetration, enabling distribution of better gaming content. When it comes to PC buying, the younger generation is contributing to the large scale sales in a significant way. Besides reading and surfing the internet, the usage of PCs for listening to music, watching movies and PC-gaming are playing a pivotal role in driving demand,? he stresses.
Since the early 1980s, AMD has competed with much larger Intel and at times has made inroads with its PC and server chips. Less than a decade ago, AMD rocked the server market with its release of the Opteron processor. This was the first 64-bit x86 chip, which had been previously limited to 32-bit processors. It forced Intel to respond with its own 64-bit chip. But like Intel, AMD was caught flat-footed in recent years with the emergence and fast growth of mobile devices. Plain speak, this Silicon Valley chipmaker is struggling to find a role in an industry increasingly focused on mobile and away from traditional PCs.
One of the greatest challenges to capturing growth in emerging markets like India is having the right leadership capability. AMD ought to be contented on this front as Ravi has several years of experience in sales & marketing, planning & distribution, and new business development in the technology industry. He joined Compaq as a start-up in India and helped kick-start computer retailing in the country and established Compaq as the market leader. During his tenure at Hewlett-Packard India, revenue grew six-fold to more than $1 billion while achieving market leadership in all product categories.
Nowadays, the chip maker?s India head is a busy man, putting together a business model for the internet age. He has his task cut out. First, gain ground on an industry rival (Intel) that is the largest and richest company in the chip business. Second, adjust to the challenge posed by mobile products that could undercut the PC industry?s growth and profits.
Figuring out the new rules of business piece by piece, Ravi reveals that AMD is following a very aggressive go-to-market strategy which is focused on advocate, motivate and demonstrate (AMD) to reach consumers. ?We are working closely with leading original equipment manufacturers, retail chains and channel partners to further strengthen our business.? Recently, the chipmaker launched its next generation of chipsets offering faster processing, better graphics and affordable performance to desktop users, especially those using gaming PCs. The new range?A Series accelerated processing units (APU)?is available at prices ranging from R3,000 to R8,000.
According to IT research firm Zinnov, the Indian domestic IT market holds significant potential in 2013. With over 5,000 large enterprises and over 10 million small and medium businesses (SMB) ready to consume IT, the $30 billion domestic IT market is expected to grow between 15-18% in 2013. A lot of new devices and form factors will come to the surface, where they would address different computing needs of the users. For instance, desktops for multitasking and high-performance computing, laptops for regular computing and entertainment needs, tablets for data consumption, smartphones for mobile computing and so on. ?The PCs are not dead. The industry is at the dawn of a new era in computing,? AMD officials reckon.
It is beyond doubt that the growing popularity of mobile devices have sapped the demand for PCs. However, analysts see AMD as a company that is innovative, creative, that can do the next big thing. As long as the internet is a powerful force in computing, business prospects for this chipmaker remain bright.
