Dell expands embrace of AMD chips

Dell plans to launch an AMD-powered desktop for its business customers this week

Dell plans to launch a desktop for its business customers today that is powered by an Advanced Micro Devices (AMD) processor, marking another step in AMD's effort to diversify its gains in the server market.

Dell's OptiPlex 740 will offer users the choice of an Athlon 64 or Athlon 64 X2 AMD processor, replacing the Intel Pentium used in the last generation machine, the OptiPlex 620. Dell also offers a similar product, the OptiPlex 745, with Intel's new "Conroe" Core 2 Duo chip. Dell declined to comment about the new product until it is released.

This win is important for AMD, which has relied on its growing success in the server market to compete with Intel in recent months. AMD has seen its greatest gains in the server market, where its share more than doubled to 25.9 percent of x86-based servers in the second quarter of 2006, according to Mercury Research.

Dell began selling its first AMD-based servers in October, including the PowerEdge 6950 and SC1435 models. On Tuesday, Gateway followed suit, announcing it would use AMD's Opteron chip in three new rack-mounted servers, the E-9422R, E-9522R and E-9722.

Despite these wins in the server segment, AMD must also win market share in the desktop and notebook segments to become an equal competitor with Intel. The company has notched wins in the last 12 months by gaining acceptance from Lenovo Group and Hewlett-Packard on desktops for corporate customers.

An array of new products from Dell should push AMD closer to its goal. Dell launched its first AMD-powered desktops in September, offering Athlon or Sempron chips in its Dimension E521 and C521. And on Friday, Dell launched its first two notebooks with AMD chips, the Inspiron 1501 and Latitude 131L. Both products offer an AMD Sempron or Turion chip.

Dell's OptiPlex 740 will also make waves in the graphics market, where Nvidia is claiming victory in one of its first product wins since AMD acquired its rival ATI. Future AMD-powered PCs will probably provide their own graphics processing, since AMD plans to bundle its technology with ATI's. But in the meantime, Nvidia is seeing the results of a campaign to sell more graphics products for commercial enterprise PCs, not just consumer gaming platforms.

The OptiPlex 740 will use Nvidia's nForce core logic package, including networking and storage interfaces as well as pure graphics, said Drew Henry, general manager of Nvidia's media and communications processor business unit. Dell chose nForce because it is a well-defined package, and corporate IT departments demand stability of drivers, software and operating systems in their business desktops, he said.

"Over the past few years, we've been slowly and very quietly moving into the server marketplace, with wins on HP, IBM and Sun," said Henry. "And we've been executing a strategy to get specified on more commercial and enterprise products."

Nvidia already has a stronghold in the workstation graphics sector, and hopes that Microsoft's Vista OS will push it toward greater success on commercial desktops in 2007, as users are forced to add more powerful graphics processing to handle the 3-D data viewing and translucent "Aero" windows.

Dell has not yet released price or availability for the Optilex 740, but the PC is expected to be Vista-capable, offer biometric security and support remote IT troubleshooting and power management. Gateway is selling its 1U E-9422R server for US$1,799, its 2U E-9522R server for US$1,849 and its 3U E-9722 for an unlisted amount.

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