Some companies are not enough strong to launch a direct attack, so they have just to do a flanking or guerrilla warfare. AMD is one of these companies, if we compare it to Intel. Also, it is the chaser if we compare it to NVIDIA.
AMD is very tiny, if we compare it to Intel, so AMD managers have to be smart: “Old African proverb: When elephants fight, it’s the ants that take a beating”. Intel is fighting against NVIDIA and IBM in server market, so it’s not wise to fight them directly. AMD has chosen to become ally of China, even if this means low earnings, to gain traction in the Chinese server market. Ries and Trout wrote about American Motors: “American Motors is too small to launch offensive attack against General Motors. […] American Motors is too small to launch a flanking attack against the industry. […] The only category that has been a consistent winner for American Motors is the Jeep. American Motors have to find a segment big enough to be profitable for the guerrilla, but too small to be tempting to the leader”.
AMD did the same in the Console market. Do you remember this NVIDIA quote? Nvidia gave AMD the PS4 because console margins are terrible. It’s an example of guerrilla warfare: “Find a segment of the market small enough to defend”.
When you will have enough money thanks to this strategy, then you can launch a flanking attack: “A good flanking move must be made into uncontested area. […] A flanking attack move does not necessarily require a new product unlike anything now on the market. But there must be some element of newness or exclusivity. The prospect must put you into a new category. […] To launch a true flanking attack, you must be the first top occupy the segment. Otherwise, it’s just an offensive attack against a defend position. […] Flanking skills requires exceptional foresight. The reason is that in a true flanking attack, there is no established market for the new product or service”.
Today, AMD is attacking the VR market, flanking the GPU market. Thanks to its leadership in console market, AMD was able to control the Directx 12 development, and now its GCN uArch is the foundation of VR hardware and software. NVIDIA was hit from behind: “The most successful flanking moves are the ones that are totally unexpected. The greater the surprise, the longer it will take the leader to react and try to cover. Surprise also tends to demoralize the competition. Their sales force is temporarily tongue-tied. They often don’t know what to say until they get directions from headquarters”. That's why NVIDA is still not talking about Async Compute features of Pascal.
VR is a new Eldorado, and the clients are often new too, so it’s a good idea selling products at high prices: “Flanking with high price: For many products, high price is a benefit. The price adds credibility to the product. […] There are two good reason why high price represents more of a marketing opportunity than low price. One is the tendency of the prospect to equate quality with price – You get what you pay for. The other is the potential for higher profit margins with a higher price”. NVIDIA did it with its Titan cards. AMD is doing the same with its dedicated VR cards.
Ries and Trout also wrote: “Flanking with small size. […] A typical example of flanking with small size is Sony. Using integrated circuits, Sony pioneered a host of innovative miniaturized products, including Tummy Television, Walkman, and Watchman”. It's not a coincidence that AMD has commercialized the Fury X, Fury Nano and the Radeon Pro Duo cards. And what about the next Polaris cards, characterized by low TDP? They will be pretty tiny.
Why AMD is almost MIA in HPC market? Because Intel and NVIDIA are too big to fight. VR market is a virgin territory. Also, Intel has no products to use in this market, and NVIDIA has to defend its HPC leadership from Intel. NVIDIA can't fight two big battles, against Intel and AMD, at the same time. NVIDIA tried to figh the gaming GPU and Mobile SoC (with Tegra) battles at the same time, but without success. NVIDIA has won the first, but it has lost the second.