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Dell dabbles with AMD

Direct-selling hardware giant Dell has called time on its longstanding exclusivity with CPU vendor Intel, announcing that it plans to introduce a range of new multi-processor servers by the end of the year built on AMD’s Opteron processors.

Direct-selling hardware giant Dell has called time on its longstanding exclusivity with CPU vendor Intel, announcing that it plans to introduce a range of new multi-processor servers by the end of the year built on AMD’s Opteron processors.

AMD issued the following statement regarding Dell’s decision: “We welcome Dell, and Dell customers, to the world of AMD64,” said Marty Seyer, AMD senior VP, commercial business. “Dell is a customer-focused company and we’re pleased to see that they are listening to their customers and providing them the choice of innovative AMD products. We look forward to working closely with Dell in bringing the benefits of AMD leadership in performance-per-watt solutions to Dell customers."

NASDAQ-quoted AMD’s share price soared more than 11% on the news late last week, while Intel shares hit a new 52-week low of US$18.36. Intel shares have now fallen 36% from a 52-week high of US$28.84 ten months ago.

Dell announced its decision to start using AMD dual core processor-based servers as part of its quarterly earnings release for the period ending May 5th, 2006. Sales for the quarter climbed 6% year-on-year to US$14.216 billion with after-tax profits slipping 18% to US$762m. Shipments increased 18 percent year-on-year in the Europe, Middle East and Africa (EMEA) theatre.

“The competitive environment has been more intense than we had planned for or understood,” said Kevin Rollins, Dell’s CEO. “Over the last year, we tried to achieve both growth and increased levels of profitability, which allowed our competitors to improve their relatively low levels of profitability and accelerate their growth. We have now taken action to reignite our growth and reassert the unique value of our direct model.”

“We are re-establishing our price position, investing in customer sales, service and support, building our product and technology leadership and improving our cost structure and productivity. All of these actions will enable Dell to optimise the significant potential we have for global growth at a time when we expect our industry to undergo significant change and consolidation,” he added.

Dell claims that it will end this year with the broadest and highest quality product portfolio its history with the launch of a new generation of storage products, desktop and notebook computers, and printers.

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