Dell's days of being the last supplier to base its PCs purely on Intel chips are numbered, according to reports.
The direct vendor is thought to be developing an Advanced Micro Devices (AMD) Athlon-based system for its consumer product line and is expected to make an announcement by June.
Although Dell has previously denied that it will use AMD, reports suggest that the company will use AMD as a second source to Intel. Jonathan Joseph, a senior analyst at researcher Smith Barney, said: "We believe there are serious supply discussions going on between Dell and AMD at the highest levels of management."
Another source predicts that Dell will introduce an Athlon-based system that will sit in the company's consumer-oriented Dimension family. He said that such a deal would be a natural fit because Dell director Mort Topfer and Hector Ruiz, AMD's president and chief operating officer, were former colleagues at Motorola.
However, the source said there is also the possibility that such a deal may fall through at the eleventh hour. "Dell may decide it neither has the internal resources or sufficient guarantees of long term supply," he said.
Dell has reportedly been unhappy about delays to Intel's 820/Rambus combination for Coppermine-based systems last autumn, and many PC manufacturers say that Athlon-based system provide significant price/performance benefits over Intel equivalents.
Although Dell was unavailable for comment, some analysts said the company could benefit from adopting AMD's Athlon processor. Linley Gwennap, a principal analyst at researcher The Linley Group, said: "Dell was hit by some of the Intel shortages. This would give it more leverage."
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