AMD: Confusion leads to delays in PC buying

Consumers are delaying hardware purchases because of their confusion over PC terminology, according to the results of a survey conducted by Advanced Micro Devices (AMD) released Monday.

AMD advocates a system-level performance rating as a way to boost hardware sales, but analysts aren't sure that consumer buying behavior is quite so simple.

A gap is forming between the technology that the PC and microprocessor industry puts on the market, and the adoption and understanding of that technology by consumers, said Patrick Moorhead, vice president of consumer advocacy and corporate marketing for AMD.

This gap results from confusion over basic technology terms, and a lack of understanding as to why a new PC will improve the user's experience, Moorhead said. "All communication starts with language. If you don't understand the language, you're going to have problems," he said.

AMD, surveyed 1,535 consumers around the world about their comfort level with various products, and quizzed respondents on the definitions of some commonly used PC terms, such as megahertz and Web browser. The survey was conducted by Synovate.

The survey's respondents had trouble identifying the correct definition of many of those terms, even among respondents who had owned a PC for several years, Moorhead said. Because of this confusion, many consumers become frustrated when researching a new PC, and postpone their technology purchases, he said.

Not all signs indicate that consumers are holding back on hardware purchases. While corporate sales of PCs have indeed been stagnant for several years, consumers have proved surprisingly resilient. IDC expects U.S. consumer PC sales to grow 10.8 percent in 2003, compared to expected growth worldwide of 6.5 percent, it said in June.

AMD has for several months undertaken a marketing campaign called the True Performance Intiative to debunk what it calls the "megahertz myth," or the belief that a PC processor's clock speed is the most important determination of performance. AMD believes that market leader Intel is misleading customers about performance by labeling its processors by their clock speed, and claims that AMD's model number rating system for its processors more accurately portrays their overall performance.

For consumers to fully understand what a PC can do for them, the industry needs to develop a system-level performance metric that can compare one PC to another, regardless of whether it uses a processor from AMD or Intel, a graphics card from Nvidia or ATI Technologies, or any number of other components from different vendors, Moorhead said.

"The key is making it relevant to the end user, taking 'What can I do differently with my new PC than my old PC?' and converting that into plain English," he said.

Far from helping to make things easier, many system vendors would rather keep the confusion alive, said Nathan Brookwood, principal analyst with Insight 64.

"Right now, I would say most of the system suppliers really take advantage of the fact that it's hard to characterize system performance in a straightforward, comprehensive manner. This lets them put together configurations with a couple of strong components, and several weak components, and get away with it," Brookwood said. Skimping on certain components can reduce the overall cost to build a PC, but the strong components can justify a higher price, he said.

Right now, the only way to compare hardware is with benchmarks. Benchmarks are tests of processor performance in completing different application tasks, and are generally sponsored by independent media organizations or industry consortiums.

Current benchmarks have generated a great deal of controversy when the results are held up to scrutiny. Over the past year, AMD, Intel, Nvidia, ATI, and Apple Computer have either lodged, or had lodged against them, allegations of cheating on benchmark tests based on the common practice of optimizing code for benchmark tests. Sometimes that optimization goes too far, according to some analysts and users, and casts doubt on the validity of benchmarks in general.

Benchmarking is also a difficult way to measure system performance because performance gains differ depending on the application being used, said Jon Peddie, president of Jon Peddie Research. For instance, a nominal increase in processor speed won't do much, if anything, for most office productivity applications or e-mail, which is the limit of PC use for most consumers, he said.

PC gamers playing the latest online games with rich graphics would benefit from a processor speed increase, and are avid readers of benchmarking results, but only make up about 7 million PC users in the U.S., Peddie said. Digital content creators also benefit from performance increases, but not necessarily in the same way that gamers do, he said.

Developing a system-level benchmark or metric that measures general performance, but also conveys the benefits of a new technology to those specific markets, would be an extremely difficult undertaking, Peddie said. The PC industry would need to take all those different markets into account and come up with a way to represent them all, which would take a lot of time and effort, he said.

Any measure of system performance would require Intel's participation, as the dominant PC processor vendor in the world. Intel currently recommends that PC buyers investigate several different sources when contemplating a PC purchase, including different hardware magazines, enthusiast Web sites, or consumer publications, said George Alfs, an Intel spokesman.

Naturally, with about 80 percent of the market for PC processors, Intel isn't advocating a large change in the way performance is measured, Peddie said. But the launch of Intel's Pentium M processor earlier this year at clock speeds slower than its previous mobile flagship Mobile Intel Pentium 4-M processor has forced the company to focus on other measures of performance than clock speed, he said.

And eventually, Intel could be persuaded to get behind a system metric that clearly explains what an increase in clock speed or cache will mean to a consumer, because that would help make the case for PC upgrades, Peddie said.

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Tom Krazit

IDG News Service
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