Sunnyvale (CA) - AMD's Hector Ruiz today provided a few more details on the expected Q1 revenue shortfall. According to Ruiz, is currently dealing with the effects of a rapid shift from a channel to an OEM-focused business model, handing Intel market share in the channel segment. AMD will have to bridge at least two more tough quarters, as the quad-core is not expected to ship until "late summer."

It was quite apparent that the chief executive would have like to have better news for the financial crowd at the Morgan Stanley Technology conference this morning. But the news that AMD will post lower revenues for the current quarter than initially expected outweighed Ruiz' "bullish" outlook for the future of AMD.

Of course, AMD's quad-core processor came up briefly during an interview-style conversation on the Morgan Stanley stage and Ruiz provided some information bits, most of what was known before, such as the expectation that the chip would outperform its predecessors by about 30 to 40% and that AMD considers the introduction of the chip as a significant launch, probably more significant than the launch of the original Opteron CPU. When it came to likely availability, Ruiz said AMD is on track to sample the "Barcelona" server quad-core CPU and will be shipping in "late summer" - which is a more detailed timeframe than the "mid-2007" or "H2 2007" we had heard in the past.

Roadmaps seen by TG Daily so far indicated that AMD was aiming for an early Q3 (July) launch of Barcelona; Ruiz' now indicated that we are looking more at an August or even September introduction of the quad-core server processor. AMD representatives, however, reiterated in a conversation with TG Daily that the company has "not provided any guidance beyond that [AMD will] launch and ship at mid-year."

Speculations about a possible delay of the CPU are sure to be surfacing, but analysts such as Dean McCarron from Mercury Research do not believe that there is reason for concern and are confident that AMD will be keeping its original schedule. With sampling underway, a "late summer" launch could mean that Barcelona server systems could be available within a few weeks after product launch, which points to Q3 or Q4. There will be little impact on the market in 2007, as AMD said that Barcelona will be ramping to higher volumes next year. At that time, however, Intel will have its second-generation, 45 nm quad-core processors in place and AMD could face a renewed challenge from Intel in a field it has conquered so successfully over the past 20 months.

Ruiz also had a few more details on the reasons why AMD has been hit revenue shortfalls lately. It has not only been the price war with Intel that impacted the company, but also changes in processor shipments that bring new challenges and risks. A couple years ago, AMD shipped the majority of its processors into the (retail) channel; more recently, the OEM business has become more important and the share between channel and OEM has "flipped," according to Ruiz. While the OEM business is growing quickly, AMD is learning and, apparently, has made mistakes: "We have not done as well as we should have," Ruiz said. For example, OEM demand has overwhelmed AMD production capacity and had to cut shipments into the channel, which allowed Intel to regain channel market share. When OEMs were not able to ship as many systems as originally planned for Q4, AMD was not able to recover as quickly as anticipated, Ruiz said.

The executive described the switch from a channel- to an OEM-focused business as "dramatic" and as a situation that "we have created for ourselves," but did not indicate that AMD would depart from this strategy anytime soon. He agreed that AMD is currently "challenged" with revenue and profitability, but did not confirm that AMD would be losing money in Q1 and Q2 of this year.

Instead, he pointed to the long-term outlook, which holds "so many opportunities for [AMD]." The company intends to innovate "around the grey box," especially in the areas of graphics and visualization, low-cost computing as well as energy-efficient computing in the enterprise space. According to Ruiz, "changing the rules" will provide AMD with "a position of leadership."