AMD Unveils Notebook PC Chips

The company takes aim at a booming market.
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SAN FRANCISCO -- Long deemed an also-ran in the notebook PC market,

Advanced Micro Devices

(AMD) - Get Report

is ready to get serious.

On Wednesday, the Sunnyvale, Calif., company unveiled a new group of chips specifically designed for notebooks, representing AMD's most concerted effort yet to get a foot in the booming market for mobile PCs.

The package of chips, known as Puma, brings together AMD's microprocessor prowess with the graphics expertise that AMD obtained through its controversial acquisition of ATI, allowing AMD to offer PC makers many of the key silicon ingredients for a modern notebook.

That's a significant step forward for AMD, which has previously been unable to offer PC makers the same type of all-in-one package as

Intel

(INTC) - Get Report

, whose Centrino bundle of WiFi connectivity, graphics and other important notebook features has helped Intel dominate the market.

Shares of AMD were recently up 21 cents, or 3.1%, to $7.02.

AMD's Puma is being released just as Intel's newest version of Centrino has hit some snags. Last week

Intel acknowledged that certain components of Centrino 2 would ship a few weeks late

on account of technical issues with the graphics processing and separate "paperwork" problems involving the WiFi radio chip.

Analysts don't expect Intel's delays to result in a major advantage for AMD.

The delays are only a few weeks, which isn't enough time for PC makers to change their product design plans and switch to AMD, says American Technology Research analyst Doug Freedman.

"Nobody can react quickly enough," says Freedman, who says the Intel delay has not caused him to change his revenue estimates for either Intel or AMD.

Still, after a year in which Intel has operated flawlessly, and AMD has suffered from its own product glitches, the latest turn of events may give AMD a little extra breathing room as it brings its latest technology to market.

As it stands, AMD chips were present in 14.5% of notebook PCs that shipped worldwide in the first quarter of 2008 , compared to Intel's 85.3% share, according to industry research firm IDC.

AMD is aiming Puma at mainstream consumers, who are increasingly using notebook PCs as a visual entertainment device for watching DVD movies and playing video games. The Puma's integrated graphics processor -- the ATI Radeon HD 3200 -- offers much improved 3D graphics, support for high-resolution video playback and support of

Microsoft's

(MSFT) - Get Report

DirectX 10, the latest software interface for video games.

While AMD does not make its own wireless chips, Puma will come with a WiFi chip from

Atheros

(ATHR)

,

Broadcom

(BRCM)

and Ralink, depending on the PC maker's preference.

According to AMD, nearly 100 different notebook PC models will feature Puma, double the number of AMD-based notebooks that were available when AMD introduced the last revamp of its Turion notebook microprocessor in 2006. Among the PC makers that will offer Puma-based notebooks are

Hewlett-Packard

(HPQ) - Get Report

,

Acer

and

Toshiba

. While

Dell

(DELL) - Get Report

was not listed among the original vendors, an AMD spokesperson said the company expects more PC vendors to announce Puma notebooks shortly.

"This is really different from the way things were five years ago when

AMD couldn't get any notebook suppliers to play ball," says Roger Kay, a technology analyst and consultant who has worked for both AMD and Intel.

Meanwhile,

Sony

(SNE) - Get Report

,

Lenovo

and

Apple

(AAPL) - Get Report

are the last three major holdouts, who refuse to incorporate AMD's chips in their notebooks at all.

But Kay says AMD does not need to convert the three holdouts into customers for Puma to be successful.

"What I would call success for now is if they

AMD manage to get sell-through; If people end up buying and OEMs come back for another round," says Kay.

"Given

AMD's current market share, that's plenty of market to work with," he adds.