All the companies in the emerging industries begin with very relatively specific products. Eventually, those specific products may become popular and widespread, or may not. Some of those companies become conglomerates, like International Business Machines, some become nothing. Those, who become successful in their primary markets, usually begin to address adjacent markets, those, who are not, begin to concentrate on one type of products and may either stagnate for years, or cease to exist.
Intel Corp.’s concentration on platforms proves that the company is enough successful on its core microprocessor markets, however, has capacity and ability to deliver products for new markets, challenging different rivals and achieving different goals. Recently the world’s largest chipmaker vowed to invest $900 million into a provider of wireless Internet access, a move, which will help the company to deploy many WiMAX networks in the
ATI Technologies, which started as a maker of graphics cards, but also used to produce communication equipment (modems) and other products, eventually gained ground in the markets of consumer electronics, handheld products, chipsets and game consoles.
Advanced Micro Devices used to clone x86 processors in the eighties and the nineties, but then had been gradually increasing forces in the CPU biz in the late nineties, just in order to fight the performance crown from Intel in 2003 and quit flash memory business in 2005.
Nvidia Corp. has always been the supplier of graphics processors, but in 2001 it started to produce its core-logic devices and in 2003 acquired MediaQ, a producer of graphics processors for handhelds. While Nvidia has been very aggressive on the markets of GPUs, chipsets and even has managed to win a couple of game console deals, it has never tried to seriously penetrate other markets, such as consumer electronics with dedicated products.
Recently X-bit labs has learnt from industrial sources that Advanced Micro Devices is going to acquire ATI Technologies, thus, to change the strategy and market behaviour of both companies. The rumours concerning the possibility began to circulate in early June, when Apjit Walia, an analyst with RBC Market Capitals, wrote in a note to clients that he would expect AMD to acquire ATI Technologies, as he thought it was consistent with AMD’s plans to expand capacities. The sources of the information may be reliable and may be not; the information may be correct and may be not. In this short editorial we will try to summarize the known facts and investigate on the matter of causes and consequences of the deal, which should be considered potential just now.