AMD 2007 Annual Report Download - page 15

Table of Contents
semiconductor manufacturers in the handheld industry. We 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. 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 enhanced multimedia and gaming
phones.
In February 2007, we announced the AMD Imageon 2298, 2294 and 2192 media processors, offering ultra-fast, high-resolution image processing,
DVD-quality video and high-definition audio for compelling mobile multimedia experiences.
Also in February 2007, we announced a new business focused on developing and licensing leading-edge graphics core technologies to semiconductor
manufacturers throughout the handheld industry. To that end, we entered into graphics licensing agreements with manufacturers of handset chipsets and handset
devices. The integration of our graphic core technologies will enable these customers to provide multimedia functionality combined with HD video and audio
playback capabilities.
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.
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.
We generally warrant that microprocessor 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 generally offer a three-year limited warranty to end users for microprocessor
products that are commonly referred to as “processors in a box,” a one-year limited warranty to direct purchasers for all other
10
Source: ADVANCED MICRO DEVIC, 10-K, February 26, 2008