New Strategy to Help AMD

By Zacks Equity Research
On 8:41 am EDT, Monday October 12, 2009

Advance Micro Devices (NYSE: AMD - News) started implementation of its new marketing program this month. Implementation is expected to be carried out in phases over the next four quarters. The new program, dubbed the Fusion Partner Program, is a consolidation of the existing four partner programs into a single interface.

Symbol	Price	Change
AMD	6.85	-0.26

CRAY	6.90	-0.19

DELL	14.14	-0.22

HPQ	49.07	-0.98

IBM	125.70	-1.58

Under the new program, AMD divides the channel into three—Elite, Premier and Select. The best selling partners of all-AMD solutions (CPU, GPU and chipset) will be placed in the Elite category, the second best in the Premier category and the balance in the Select category. Each category is further split according to the business model followed by partners—e-tailer, retailer, commercial solution provider, consumer solution provider or commercial volume reseller.

This categorization of the partners’ businesses would enable AMD to gauge the performance of the partners as well as the nature of demand at end-customers served by them. This, in turn, would help the company serve such customers better and even extend solutions to areas previously missed out.

Therefore, overall, the system should be effective in improving the company’s reach across all served geographies. AMD intends to provide improved tools and resources, as well as online and offline training facilities suited to each partner’s individual business models.

While some of the new tools are already available, the company intends to provide further resources, including co-marketing programs and an enhanced partner Web portal (expected to launch in 2010). The incentive program is also being revamped and enhanced in accordance with the above categorization in order to provide maximum return to the company’s most lucrative and loyal partners.

The company has a very long list of partners that include companies like Hewlett Packard Company (NYSE: HPQ - News), Dell, Inc. (NasdaqGS: DELL - News), Cray, Inc. (NasdaqGM: CRAY - News) and International Business Machines (NYSE: IBM - News). Last week, the company also replaced its CFO. The new man Thomas Seifert was previously the SVP and GM of the Wireline Business Group at Infineon AG (Other OTC: IFFNY.PK - News) followed by COO and board member of Quimoda (which recently went bankrupt).