AMD takes exception to Intel's tablet rebates

Advanced Micro Devices is bristling at Intel's strategy of offering rebates to device makers that use its chips for tablets.

The Android-based Dell Venue 7 starts at $149.99 with an Intel Atom processor. Intel needs to win over lots of tablet makers in 2014 to hit its target of 40 million Dell

Advanced Micro Devices wondered out loud on Thursday about rebates that its longtime rival Intel offers to tablet makers to incentivize them to use its chips.

"We have a competitor that's really taking a different approach in terms of revenue management," AMD Chief Executive Rory Read said during a first-quarter conference call on Thursday.

"They have a different philosophy on profitability sometimes...This idea of contra revenue is a foreign idea to us," he said.

Contra revenue refers to rebates that Intel gives device makers to incentivize them to use its chips. In this case, chips that go into tablets.

AMD's comments probably shouldn't come as a great surprise, as Intel spent a lot of time during its own earnings conference call on Tuesday discussing contra revenue with analysts.

Intel's strategy calls for using contra revenue to make sure it hits a stated goal of 40 million tablets shipped this year with its chips inside. In the first quarter, Intel said 5 million tablets shipped with its processors.

On Thursday, AMD reported a loss for the first quarter of $20 million, or three cents per share, compared with a loss of $146 million, or 19 cents a share in the year-earlier period. Revenue rose to $1.4 billion from $1.09 billion, a jump of 28 percent compared with last year.