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AMD to unveil chip amid earnings woes

Advanced Micro Devices will launch a new mobile Athlon processor for notebook PCs. But bad news awaits investors, as the chipmaker gets ready to report earnings.

Advanced Micro Devices will have good news for customers next week, but bad news for investors.

The good news comes Monday, when, according to sources close to the company, the chipmaker will launch a new mobile Athlon XP 1800+ processor for notebook PCs.

The new 1800+ chip will run at 1.53GHz, a 66MHz boost over AMD's 1.47GHz Athlon XP 1700+, making the new processor the chipmaker's fastest mobile offering to date. It's also AMD's first new mobile announcement since April, when the company introduced the mobile Athlon XP.

The bad news, however, arrives Wednesday, when AMD reports earnings for the second quarter.

The company's numbers for the quarter will come in lower than originally expected, owing to weaker-than-anticipated sales in key areas such as consumer PCs in the United States and Europe.

AMD alerted investors in June that its quarterly revenue would fall below expectations. It originally forecast revenue of $820 million to $900 million but revised that figure downward to between $620 million and $700 million. On July 3, AMD revised its expectations downward again, saying it would report revenue of about $600 million for the quarter.

Notebooks, which have been important to the Athlon XP's success, took a hit during the second quarter, the company said.

But the chipmaker hopes to get back on track with the new 1800+ and with some new packaging that will help the mobile Athlon XP chip enter other niches in the mobile market.

The 1800+ chip will find a home first in a new Pavilion ze1250 notebook from Hewlett-Packard.

The new Pavilion will pair the chip with a 15-inch screen, 512MB of RAM, a 30GB hard drive, and a combination CD-rewritable/DVD. It will sell for $1,799 before rebates, according to HP's Web site.

HP also offers mobile Athlon XP chips in its Compaq Computer Presario 900 notebook, while Sony sells the chip in its Vaio FXA notebook. These machines are also likely to get the new chip eventually.

AMD declined to comment on unannounced products.

The chipmaker has said, however, that it plans to introduce several more Athlon XP model number chips for notebooks and desktops throughout the rest of this year.

While it does work to increase performance, AMD is also eyeing thinner and lighter notebooks as a new opportunity for its mobile Athlon XP.

AMD has developed a smaller, thinner package than it currently uses to affix the mobile Athlon XP to a motherboard inside a notebook. The new package--along with the fact that the new chip consumes about 25 percent less power than AMD's older Athlon 4 mobile processor and produces less heat as well--will allow the 1800+ to be used in thinner and lighter notebooks.

Currently, the mobile Athlon XP is used by manufacturers in full-sized notebooks in the 6-pound to 8-pound category. The new Pavilion ze1250 is a good example, weighing in at 6.6 pounds and measuring 1.4-inches thick.

The new package will let manufacturers fit the mobile Athlon XP into so-called thin-and-light notebooks, which typically fall in the 4-pound to 5-pound range.

AMD has already begun shipping mobile Athlon XP chips in the new package in small quantities and will announce the package by the end of the year, the company has said.