Well not yet, but that is the plan. And I wonder if investors realize the potential. My guess is that Advanced Micro Devices (really their recently bought ATI division) is poised to make a bunch of money putting graphics processors into mobile phones. and this fact is not fully priced into the stock.
I wonder if investors are able to see past the PC market, when they think about AMD. It seems that all of the focus is on their competition with Intel. Meanwhile, the graphics card market is still ripe for growth. People, I think, finally realize that ATI and Nvidia supply chips for gaming consoles, and that part of the business is priced in. But what about the cell phone market? And the cell phone market is much bigger than the gaming console market. It may even be much bigger than the PC market, and with faster turnarounds.
There are more cell phones than PCs. And cell phones are replaced more often.
I wish I had some good sources for the above statements, but I don’t. And I don’t have time to research, and am not really that great of a researcher anyway. Here is some anecdotal evidence though:
(1) Supposedly, the World Fact Book puts the number of PCs (at least for the top 9 countries) at about 360 million. Not sure what year these numbers are from. But we could multiply them by 7 and still get a number close to estimates for world-wide cell phone adoption.
(2) In the developing world, cell phones are more often a person primary way to getting online. Suggesting that computers are not as numerous or at least not as networked. And I’d suggest that a computer that is not online is not likely to be upgraded any time soon. [CNN Article]
(3) Wikipedia also has some staggering cell phone subscriber numbers. “The total number of mobile phone subscribers in the world was estimated at 2.14 billion in 2005.”
(4) How long is the PC cycle? 3 years? 4 years (college term)? 5 years (time between major windows releases)?
(5) How long is the cell phone cycle? Most contracts will give you a new phone every 2 years? Some every 1 year? Plus, cell phone innovations are arguably happening faster than PC innovations… another reason that the turn around on cell phones is much shorter.
Ok, but do we need GPUs in phones?
In any case, the cell phone market is nothing to sneeze at. But do we really need powerful graphics chips in our cell phones? Check this out. And this. Now that first video is actually running off an Nvidia chip. The second is the iPhone, and I’m not sure who is supplying the graphics chips. Here is some more on the new nVidia chips, which are pretty exciting. Perhaps we should be investing in them too. Why not?
Some more tidbits on AMD and Nvidia chips in phones:
– AMD Making a Cellular Graphics Push by Andy Patrizio.
– ATI/Nvidia Launch New Handheld Graphics Processors by Bryan Gardiner.
– Nvidia’s New Angle on Graphics via Investor’s Business Daily.
What about gaming?
I don’t think gaming is going to be as big on cell phones as people think. Dedicated devices, like the Nintendo DS, will rule here for a few more years. That said, phones are still going to need some GPU muscle. The menu systems alone require it. Add to that video playback and recording and high-resolution photo processing. We may not be playing Halo on our phones, but we’ll still need a GPU to check our flashy flashy email.
I’d be very interested to here what other folks out there think about this. Am I crazy. Is AMD going to play seconds to Nvidia in the GPU market like they have with Intel in the CPU market? Are the other problems with the company (like their burning of cash) too much to consider investing?