In the quarter dissected this Thursday, AMD's net-income loss was $74m GAAP or $65m non-GAAP. In the first quarter of this year, those negative numbers were $146m and $94m, respectively. In the last quarter of 2012, they were $473m and $102m in the hole; the quarter before that, $157m and $150m below zero.In the quarter before that – the year-ago quarter from Thursday's report – the numbers weren't in negative territory, with GAAP net income being $37m and non-GAAP, $46m.It may be that Read and Kumar are right, and that AMD will turn a profit when it announces the results for the current quarter on October 17. Don't expect huge numbers, but after the past four quarters, any number without a minus sign in front of it would be welcome.From what the two execs reported, AMD has reason to be optimistic, despite the PC sales stagnation that is bedeviling companies from Intel to Dell to Microsoft. In fact, Read said, consumer reluctance to plop down big bucks for a desktop or laptop may be helping AMD. Clearly the market is moving down into the entry and mainstream price points where we've played very well, he said, and I think this is a very good opportunity for us to continue to build share.
AMD's general manager of global business units Lisa Su, also on the call, agreed with her boss. We have typically been stronger in those lower price points, let's call it the $300 to $600 system range, she said, and we have seen strength in that area. So overall I would say that our mix has shifted a little bit to the lower end, and I think that's typical of the market.That's likely the case, but as Read noted, the PC market is not where the bulk of AMD's growth will come from – even considering that the company has design wins for its Kabini APU in laptops from such manufacturers as Acer, Asus, Dell, HP, Lenovo, and Samsung. Rather, it will be in the new markets into which AMD is moving: what he refers to as semi-custom SoCs for such markets as game consoles, industrial use, and even casino gambling.We are on target to generate 20 per cent of our revenue outside of the traditional PC space to semi-custom and embedded products by Q4 2013, Read said.
Those semi-custom chips are key to AMD's attempt to move into higher-growth markets. The plan is to use existing and future company CPU, GPU, and APU designs in chips that are configured for specific customers and baked in the fabs of AMD's foundry partners TSMC and GlobalFoundries – although Kumar could not be drawn out on which foundry is manufacturing the chips for AMD customers such as Microsoft for the Xbox, Sony for the PlayStation 4, and Nintendo for the Wii U.Over the next two or three years, Read said, AMD aims to transform itself into a company that derives 40 to 50 per cent of its revenue from what he characterized as high-growth markets outside the x86 PC and server markets, including semi-custom SoCs, ARM-based server chips, professional graphics, and chips for ultra–low power devices such as tablets and embedded applications.Remember, Read said, we're executing a three-step turnaround strategy. We did the reset and the restructure – we've completed that. Now we're in the beginning of the turn and the acceleration as we execute the product plan and the move. Next up will be the transition to that 40 to 50 per cent high-growth market mix.
According to Read, AMD is currently three or four quarters into its turnaround, and the strategy is right on track. That optimism is, of course, exactly what a CEO should exhibit when talking with reporters and analysts after announcing financial results that may have beaten Wall Street expectations but still included a net income loss of $29m GAAP and $20m non-GAAP.If the GAAP (generally accepted accounting principles) versus non-GAAP distinction leaves you shaking your head, you're not alone. One simple way of explaining the difference – and one that a true-blue bean counter will likely find overly simplistic – is that GAAP numbers, which take into account various and sundry one-time or short-term write-offs, payments, restructuring costs, and the like, reflect a company's situation, while non-GAAP numbers, which often ignore them, measure a company's performance in its core business activities.
A company can perform quite well in one quarter, but if it's bleeding torrents of money from a multitude of wounds, the GAAP numbers will reflect that danger. On the other hand, a company that's chugging along quite fine in its core business but has a big ol' one-time mistake to write off will look like GAAP crap, and so the non-GAAP numbers can be a better indication of its health – and its future, which is what the Wall Street moneymen want to know.Sick of the number of reported phone thefts in their jurisdictions, lawmakers have decided to hold a contest to discover how easy it is to crack stolen smartphones for resale.New York attorney general Eric Schneiderman and San Francisco district attorney George Gascón have hired Northern California Regional Intelligence Center staff to try to crack the activation lock on an iPhone 5 and a Samsung Galaxy S 4 that was running $29.95 per year Lojack software.
Finding technical solutions that will remove the economic value of stolen smartphones is critical to ending the national epidemic of violent street crimes commonly known as 'Apple Picking', said the pair.While we are appreciative of the efforts made by Apple and Samsung to improve security of the devices they sell, we are not going to take them at their word, they said. Today we will assess the solutions they are proposing and see if they stand up to the tactics commonly employed by thieves.The testing will involve breaking into the handset and disabling any features that would allow the owner to track the phone. Once these have been broken, the device can usually be wiped, reset, and sold on.Thieves are getting increasingly savvy about getting around these smartphone tracking features, and police report that taking electronic tracking into account is all part of the criminal business these days.Certainly smartphone theft is increasingly common, with the FCC reporting that one in three robberies in major cities now involve the theft of such devices. We're carrying something with the price of a laptop computer in our pockets, and thieves follow the money.
Last month the two lawmakers launched the Secure our Smartphones Initiative (SOS – predictably) to push mobile phone makers into installing a kill switch into their code that would allow the device to be rendered useless in the event of a loss or theft.Together, we are working to ensure that the industry imbeds persistent technology that is effective, ubiquitous and free to consumers in every smartphone introduced to the market by next year, they said.Nevertheless, El Reg has to take issue with the math behind some of the lawmaker's claims. According to their statement roughly 113 smartphones are stolen or stolen every minute in the US. That's 162,720 per day, or 59.3 million per year.Smartphone usage rates are high in the US, but not that high. Taking out those too young, poor, or uninterested in owning such a device, then that roughly sounds somewhat overstated.
Google reported hefty earnings of $14.11bn on Monday for the second quarter of its fiscal year, up 19 per cent on the same quarter a year ago.The growth was even ahead of last quarter's $13.97bn, though that had been down on Q4 2012's $14.42bn and Q3's $14.10bn.Net income was $3.23bn, down slightly on quarter one's $3.35bn, but up on the $2.79bn reported in the second quarter of 2012. Non-GAAP earnings per share was $9.56, compared with $10.16 in the second quarter of 2012.The results came in significantly below analyst estimates of $10.17 earnings per share, and $14.42bn in revenue.Ad revenues climbed slightly to $8.87bn, from $8.64bn in the previous quarter, and represented 68 percent of Google's revenues – up from 67 per cent previously.
Paid clicks increased by 4 per cent on the previous quarter, and 23 per cent over Q2 2012.But the slide in value of actual clicks – Google's core business – continued, with cost-per-clicks falling 2 per cent on the previous quarter, which was in itself down 4 per cent on Q4 2012, and 6 per cent on the same quarter a year ago.The fall in cost-per-clicks is most likely due to the proliferation of mobile devices and a shift in browsing habits as people spend less time on desktops and more time browsing from devices on the go, where they are thought to be less keen to click on ads.Given Google's fostering of Android we're sure that some nights in Mountain View executives are a little confused as to how they let this particular genie out of the bottle.Traffic-acquisition costs increased to $3.01bn from 2.96bn the previous quarter, but held steady at 25 per cent of overall revenues.Other revenues – which pulls in revenues from things like the Google Play store, Chromebooks, and Google Apps for Enterprise – can be considered an indicator of performance for Google's strategically important non-search products, remained flat at $1.05bn, or around 8 per cent of Google's revenues.
Now more than half of the fortune 500 companies use a paid enterprise product from Google - this means we've got close long-term relationships with our customers, Nikesh Arora, Google's chief business officer, said.The rot remains at Motorola Mobile, with the division reporting revenues of $998m or 7 per cent of consolidated revenues, compared to $1.05bn in the previous quarter, and $1.51bn in the quarter before that.Capital expenditures – data centers, IT equipment, and offices – jumped as well to $1.6bn, compared to $1.2bn for the previous quarter.Google had a great quarter, Larry Page said on a call discussing the earnings. We live in a world of abundant computing. It is a very different environment from when Google started, there was one OS in one device category, the PC.