Executives at Advanced Micro Devices Inc. are pursuing a new strategy to combine CPUs and graphics processors into one unit and put them into everything from workstations to HDTVs to wireless phones.

At a meeting of industry analysts and journalists Thursday at AMD's headquarters in Sunnyvale, California, AMD outlined its two-pronged approach of continuing to sell to the server and desktop computer markets while also pursuing the growing market for multifunction cell phones and consumer electronics like gaming consoles and Web-connected TV set top boxes.

The strategy is intended to leverage AMD's 2006 acquisition of graphics processor ATI Technologies Inc. and expand beyond AMD's core server and PC market to the growing home entertainment and mobile device markets. While intended to enhance AMD's stance against chip rival Intel Corp., one analyst said it would pit AMD against new challengers already in the mobile space.

AMD calls it the "Bulldozer and Bobcat" strategy, said Phil Hester, corporate vice president and chief technology officer for AMD. The Bulldozer line represents the server, workstation and PC market, while Bobcat, a reference to a smaller type of construction vehicle that is about the size of a fork-lift represents smaller handheld devices and consumer electronics.

AMD plans to develop these new processors on the same x86 processor architecture of its PC and server chips, Hester said. The company expects Bulldozer and Bobcat processors to hit the market sometime in 2009.

"We want to fuse the capability of AMD and ATI," said Hester. "There is a set of components available today from the converged AMD and from ATI. The fusion is trying to take those components and integrate them effectively."

AMD executives believe that there is more growth potential in the smaller device end of the market given that many cell phones and PDAs have video screens to watch shows or music videos. In the home, gaming consoles, set-top boxes and HDTVs are all becoming Web-connected and also deliver high-end graphics.

But AMD faces other entrenched processor makers in the portable device market, said Jim McGregor, an industry analyst with the research firm InStat. Companies such as ARM, developer of the Advanced RISC Machine (ARM) processor architecture, and MIPS Technologies are leaders there.

"ARM is not standing still. They're already out there with their installed base," McGregor said. He applauded AMD, however, for focusing on the mobile space because that's where the market is going as consumers want to have Internet access on the go but don't want to drag around a laptop all day.

AMD also provided more details on its Barcelona quad-core processor, due for release sometime yet this quarter. The Barcelona will come in three models, said Randy Allen, corporate vice president of AMD's server and workstation division.

AMD expects 17 per cent of its Barcelona shipments to be the HE, which is designed to maximize power efficiency, with a top processor speed of 1.9GHz. It expects 77 per cent of shipments to be of its Standard model, a 2.0GHz processor, which it says fits in the "sweet spot" between energy-efficiency and performance. Third will be the SE model, that operates at up to 2.3GHz and will account for 6 per cent of shipments.

AMD didn't provide pricing information for its quad-core chips or give a more precise date for its availability.