AMD 2006 Annual Report Download - page 15

Table of Contents
Our products for consumer electronics devices include media processors used in handheld devices such as mobile phones and video processors used in
digital TVs. We also receive royalties from game console manufacturers in connection with sales of systems that incorporate our graphics intellectual property
and designs. With each of these products we provide drivers and supporting software that enable the effective use of these products by our customers.
Handheld Devices. The latest generation of handheld devices, particularly mobile phones, are driving demand for more advanced multimedia processors.
Higher resolution displays, higher performing embedded processors, increased internal and removable storage, mobile email and PDA-like features as well as
multimedia functionality such as built-in digital cameras, MP3 audio playback, video playback, mobile TV and 3D gaming are all contributing to rapid changes
in handheld and mobile communication devices.
Our AMD Imageon™ product line provides visual processing, high quality audio and power saving technologies. We offer products for each category of
the mobile phone media processor market: entry level, feature phones, performance phones and fully loaded multimedia and gaming phones. The AMD Imageon
video engine enables a mobile digital camcorder/player and supports advanced features such as video-telephony and video-streaming. We also provide AMD
Imageon products that include a programmable audio engine that enables features such as positional 3D sound, CD-quality ring-tones and music phones with
high-quality stereo recording and playback.
Digital TVs. As television broadcasters in North America and other parts of the world transition their analog television signals to digital transmissions,
we believe increased consumer interest in digital TV will spur demand for more advanced systems. Digital transmission standards provide significant advantages
compared to analog standards, including greater picture clarity and resolution as well as opportunities for more channels, e-commerce and enhanced TV viewing.
We offer two groups of products that target two major silicon blocks inside an integrated digital TV: the digital video receiver and the decoder. An
integrated digital TV is one where a digital receiver and digital video decoder are integrated inside the TV rather than externally, such as via a set top box. Our
AMD Xilleon™ and Theater™ product lines are used in integrated digital TVs to demodulate and decode digital broadcast signals. AMD Xilleon products also
provide video, graphics and audio processing. The drivers and supporting software that we provide with our digital TV products allow deployment in multiple
worldwide markets with either customer designed applications or AMD supplied Customer Application Ready Design (CARD) software applications.
In September 2006, we announced the AMD Xilleon® 260, an SoC product that supports full high-definition for worldwide digital TV standards including
Europe, Japan, Korea and North America. The AMD Xilleon 260 includes a powerful video pipeline for both standard-definition and HD content. Advanced
features which enhance image quality include HD de-interlacing, a 3D comb filter, dynamic contrast, noise reduction, sharpness, and color control.
Game Consoles. We also leverage our core visual processing technology into the game console market. Our customized GPUs process the graphics in
the Microsoft® Xbox 360™, Nintendo Wii and Nintendo GameCube videogame consoles.
Marketing and Sales
We sell our products through our direct sales force and through independent sales representatives in both domestic and international markets pursuant to
non-exclusive agreements. Our sales arrangements generally operate on the basis of product forecasts provided by the particular customer, but do not typically
include any commitment or requirement for minimum product purchases. We primarily use binding purchase orders, sales order acknowledgments, and
contractual agreements as evidence of our sales arrangements. Our agreements typically contain standard terms and conditions covering matters such as payment
terms, warranties and indemnities for issues specific to our products.
10
Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2007