AMD’s Comeback Doesn’t Extend to Laptops

Advanced Micro Devices (NASDAQ: AMD) launched laptop versions of its Ryzen PC chips, Ryzen Mobile, late last year. I said at the time that AMD faced a tough road ahead, mostly because the pricing of the first Ryzen Mobile devices seemed too high. That may have been an understatement.

It turns out that AMD has made essentially no progress at all in the laptop market, according to data from Susquehanna analyst Christopher Rolland. The company is doing a lot better in the desktop PC market, but it looks like Intel‘s (NASDAQ: INTC) stranglehold on laptops remains in place.

Image source: AMD.

Still losing share

Rolland’s data puts AMD’s second-quarter laptop CPU market share at a new low of just 3.2%, with Ryzen Mobile accounting for just 0.5% of the total market. That would put Intel’s market share at nearly 97%. It’s not clear whether this market share data pertains to laptops sold to consumers or to shipments of chips to OEMs, but I would assume it’s the former.

The desktop CPU market is a different story, with AMD claiming a 15.2% share in the second quarter, according to Rolland’s data. With the launch of its second-generation Ryzen desktop chips earlier this year, AMD is well positioned to win more market share this year.

There’s another data point that bodes poorly for AMD’s laptop efforts. In Amazon‘s list of best-selling laptops, only three AMD-powered devices show up in the top 15. And guess what? All three feature older, pre-Ryzen Mobile processors. Ryzen is nowhere to be seen.

Why progress is slow

There are a few reasons Ryzen Mobile isn’t gaining traction. The first is that there’s a fundamental difference between the desktop and laptop markets. AMD can win desktop CPU market share in two ways: Getting OEMs to build desktop systems around Ryzen chips, and selling chips through retailers to those building their own machines. In the laptop market, only the first option applies.

It’s only been about six months since the first Ryzen Mobile devices hit the market. It takes time for OEMs to design new systems around new chips, so it’s probably a little too early to truly judge whether Ryzen Mobile is a success or failure. This upcoming back-to-school and holiday season should provide a clearer picture.

Another problem is pricing. For laptop buyers who don’t care about graphics, an Intel-based system can be had for a few hundred dollars. The top-selling laptop on Amazon right now is the Acer Aspire E 15, a $379 device powered by an Intel i3 processor.

For those who do care about graphics, laptops with discrete graphics chips from NVIDIA don’t cost all that much anymore. The same Acer model with a faster processor and an NVIDIA GeForce MX150 graphics chip is the No. 3 best-selling laptop on Amazon, going for $599. The least-expensive Ryzen Mobile laptop available on Amazon is $549, with the rest above the $600 mark. It seems to me that Ryzen-based laptops just aren’t priced right relative to the competition.

This may take years

It’s not surprising that AMD is having more trouble winning share in the laptop market compared to the desktop market. Laptop makers can’t turn on a dime, after all. AMD did say during its latest earnings call that mobile chip shipments increased by a double-digit percentage in the first quarter, driven by planned OEM system launches in the second quarter. But remember that AMD is growing from a very small base in the laptop market, so double-digit growth sounds more impressive than it really is. Rolland’s data suggests that these shipments haven’t yet led to an increase in AMD-powered laptop sales to consumers.

None of this means AMD can’t make a comeback in the laptop market, but it may take until the second generation of Ryzen Mobile for the company to gain any real traction.

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