AMD 2004 Annual Report Download - page 13

Table of Contents
In October 2004, we launched the Personal Internet Communicator (PIC), a consumer device that we believe will help provide affordable Internet access to
first time technology users in high-growth markets such as Brazil, the Caribbean, China, India, Mexico and Russia. Through the PIC, end users are provided with
access to a variety of communication and productivity tools such as an Internet browser, e-mail, word processing, spreadsheet applications and a presentation
viewer. The PIC runs on an operating system powered by Microsoft Windows technology. The PIC is manufactured by third-parties, and is designed to be
branded, marketed and sold by local service providers such as telecommunications companies and government-sponsored communications programs. We supply
the embedded microprocessors for the PIC. We developed the PIC in support of our 50x15 initiative, which is our goal to deliver affordable, accessible Internet
connectivity and computing capabilities to 50 percent of the world’s population by 2015.
We believe our personal connectivity solutions offer our customers high performance at low power, faster time to market and lower product costs. Our
strategy is to continue providing cost-effective embedded microprocessors for personal connectivity devices that our customers can deploy quickly in their
applications.
Marketing and Sales
We market and sell our products, other than Flash memory products, under the AMD trademark. We sell our products through our direct sales force and
through third-party distributors and independent sales representatives in both domestic and international markets pursuant to non-exclusive agreements. Our
AMD channel partner programs provide product information, training and marketing materials.
Spansion Flash memory products are marketed and sold under the Spansion trademark. We and Fujitsu act as distributors of Spansion Flash memory
products and receive a commission from Spansion. We distribute Spansion products in the same manner as we sell our other products, through our direct sales
force and through third-party distributors and independent sales representatives.
We market our products through our direct marketing and co-marketing programs. Our direct marketing activities include print and Web-based advertising
as well as consumer and trade events and other industry and consumer communications. In addition, we have cooperative advertising and marketing programs
with our customers, including market development programs. Under these programs, eligible customers can use market development funds in partial
reimbursement for advertisements and marketing programs related to our products.
Customers
Our customers consist primarily of OEMs and third-party distributors in both domestic and international markets. We generally warrant that products sold
to our customers will, at the time of shipment, be free from defects in workmanship and materials and conform to our approved specifications. Subject to certain
exceptions, we offer a three-year limited warranty to end users for microprocessor products that are commonly referred to as “processors in a box” and a
one-year limited warranty to direct purchasers of all other microprocessor, Flash memory and embedded processor products. Under limited circumstances, we
may offer an extended limited warranty to direct purchasers of Flash memory products or of microprocessor products that are intended for systems targeted at the
commercial and embedded end markets. Generally, our customers may cancel orders 30 days prior to shipment without incurring a penalty.
Original Equipment Manufacturers
We focus on three types of OEMs: multi-nationals, selected regional accounts and target market customers. Large multi-nationals and regional accounts
are our core OEM customers. Our OEM customers for microprocessors include numerous foreign and domestic manufacturers of PCs and PC motherboards. Our
OEM customers for Flash memory products include foreign and domestic manufacturers of mobile telephones, consumer electronics, automotive electronics and
networking equipment companies. Generally, OEMs do not
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2005