Is Dell's AMD partnership a leverage tool?

— 3:20 PM on June 28, 2006

DigiTimes has revealed an interesting take on Dell's new relationship with AMD, which recent rumors suggest will yield some AMD-powered Dell notebooks in the near future. According to industry sources quoted by DigiTimes, the relationship is a reaction to OEM pricing reforms planned by Intel. Last month, the site reported that Intel planned to enforce flat pricing across the OEM and retail channels from September on. The Inquirer added yesterday that this "flat pricing" will actually be in tiers and that Dell will still get discounts over retailers and smaller OEMs. However, those discounts will be fixed, and Dell will reportedly pay the same as competitors like HP and Lenovo regardless of how many chips it orders.

With either flat or tiered pricing, Dell will likely end up paying more, and DigiTimes' sources believe the AMD server deal was a warning for Intel to change its pricing plans. Servers were the first strike, and the sources say Dell is now using AMD notebooks as a bargaining tool to squeeze lower prices out of Intel. A similar strategy already worked last year: Taiwanese notebook makers claim Dell was prepping some notebooks with AMD processors, but juicy pricing incentives from Intel made Dell postpone the project.

History may not repeat itself, however, because DigiTimes says Intel "shows no sign that it will change its mind" this time around. Additionally, The Inquirer claims Intel plans to give Apple and Lenovo the majority of its initial mobile Core 2 Duo shipments, leaving Dell with potential shortages during the back-to-school rush. Combined with increased pricing, such supply favoritism could cement Dell's plans to sell AMD-based laptops.

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