Good AMD Move to Add Differentiation

Implications: AMD adds the potential to gobble up more of the PC silicon

The graphics chip is a big differentiator in the consumer PC and game market

Computer companies will look at whole package offering of AMD vs Intel

Analysis: As a rep for S-3in the 90s it was obvious from their success in dominating the PC graphics chip business that the PC makers considered the graphics chip as a differentiator against their rivals. Intel always wanted to control the graphics chip business, but was not successful due to the better offerings of Tseng Labs then S-3 and finally ATI and NVidea. There certainly is a difference between Intel and AMD now because of the power and multiple processors, but as they catch up they will be more and more alike.
The graphics chip approach by AMD lets them keep a permanent difference in silicon, although the ASP for the graphics chip and the margin is lower than the processor. ATI can also benefit from an early awareness of the new processors coming.
It will be key to keep the graphics chip designers happy.