(Dallas Morning News, The (KRT) Via Thomson Dialog NewsEdge) May 18--Dell Inc. will introduce a server using Advanced Micro Devices Inc.'s processor chips, ending its longtime fidelity to Intel Corp., the company said Thursday.
The move has serious implications in the computer industry. Dell and Intel's relationship has been one of the mightiest alliances in the technology world and is considered a key part of Dell's success.
But AMD has been chipping away at Intel's dominance in the last year. Dell has been hamstrung by using Intel as its sole supplier and needs to offer AMD-based products, analysts have said.
The AMD news overshadowed Dell's first-quarter earnings report Thursday. The company's profit fell 18 percent from a year ago, and sales grew 6 percent, a tepid rate compared with previous quarters.
"The competitive environment has been more intense than we had planned for or understood," said Kevin Rollins, Dell's chief executive, in a written statement. But Dell is making investments in technology and customer experience to resume its historical pattern of growth, he said.
For part of the growth, Dell will look to AMD, based in California with major operations in Austin. The AMD-based Dell server, to be introduced by the end of the year, will have four processors. That means it will be in a high-end category mainly aimed at big, corporate customers, said Roger Kay of Endpoint Technologies Associates, a research firm.
"This is the area where they were hurting the worst," he said.
Intel is still the sole supplier of processors for Dell's personal computers, except for computers made by its recently acquired Alienware unit.
