Computer business Dell stated on Thursday that it was going to start using chips from Advanced Micro Devices. Both AMD and Dell stock shares rose over 13 percent, while Dell’s only chip supplier before Thursday, Intel fell more than five percent.
Computer business Dell has been struggling lately and experienced an 18 percent decline in profit in the last quarter. The computer company was the last to use only Intel processors. The decision to finally use chips from AMD finally confirms that Dell has been courting AMD for quite a while.
According to the computer business, Dell will introduce multiprocessor server computers using Opteron by the end of 2006.
Analysts have been going back and forth with estimates for Dell’s earnings in the future. Experts are not certain why aggressive pricing from Dell will improve profits, particularly since this technique did not work when it was implemented at the end of the last quarter. Other companies, including HP, have achieved success only when they lowered prices because of using cheaper components and more efficient manufacturing systems.
Dell stated it would end a long-running practice of giving earnings per share and revenue predictions regularly. The computer business only revealed that it was expecting financial results for the second quarter of 2007 to be near to those in the first quarter. Experts say this vague reporting is only further proof that Dell is very uncertain of its future business.
Added By: Computer Consulting Kit