AMD 2013 Annual Report Download - page 26

• control over industry standards, PC manufacturers and other PC industry participants, including
motherboard, memory, chipset and basic input/output system, or BIOS, suppliers and software
companies as well as the graphics interface for Intel platforms; and
• marketing and advertising expenditures in support of positioning the Intel brand over the brand of its
OEM customers.
Intel’s dominant position in the microprocessor market and integrated graphics chipset market, its
introduction of competitive new products, its existing relationships with top-tier OEMs and its aggressive
marketing and pricing strategies could result in lower unit sales and a lower average selling price for our
products, which could have a material adverse effect on us.
The success of our business is dependent upon our ability to introduce products on a timely basis with features
and performance levels that provide value to our customers while supporting and coinciding with significant
industry transitions.
Our success depends to a significant extent on the development, qualification, implementation and
acceptance of new product designs and improvements that provide value to our customers. Our ability to
develop, qualify and distribute, and have manufactured, new products and related technologies to meet evolving
industry requirements, at prices acceptable to our customers and on a timely basis are significant factors in
determining our competitiveness in our target markets. For example, form factors have increasingly shifted from
desktop PCs and notebooks to tablets, and tablets have been one of the fastest growing form factors. Historically,
a significant portion of our Computing Solutions revenue has been related to desktop PCs. Currently, a
significant portion of our business is focused on the consumer PC portions of the market, and we believe that PC
market conditions will remain challenging. As consumers adopt new form factors and have different
requirements than those consumers in the PC market, PC sales could be negatively impacted, which could
negatively impact our business. If we fail to or are delayed in developing, qualifying or shipping new products or
technologies that provide value to our customers and address these new trends or if we fail to predict which new
form factors consumers will adopt, we may lose competitive positioning, which could cause us to lose market
share and require us to discount the selling prices of our products. Although we make substantial investments in
research and development, we cannot be certain that we will be able to develop, obtain or successfully implement
new products and technologies on a timely basis.
Delays in developing, qualifying or shipping new products can also cause us to miss our customers’ product
design windows or, in some cases, breach contractual obligations or cause us to pay penalties. If our customers
do not include our products in the initial design of their computer systems or products, they will typically not use
our products in their systems or products until at least the next design configuration. The process of being
qualified for inclusion in a customer’s system or product can be lengthy and could cause us to further miss a
cycle in the demand of end-users, which also could result in a loss of market share and harm our business.
Moreover, market demand requires that products incorporate new features and performance standards on an
industry-wide basis. Over the life of a specific product, the sale price is typically reduced over time. The
introduction of new products and enhancements to existing products is necessary to maintain the overall
corporate average selling price. If we are unable to introduce new products with sufficiently high sale prices or to
increase unit sales volumes capable of offsetting the reductions in the sale prices of existing products over time,
our business could be materially adversely affected.
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