April 24, 2007 3:30 PM PDT

Intel's market share rises on AMD's problems

Intel gained back some chip market share on the heels of Advanced Micro Devices' abysmal first quarter.

JP Morgan released a research note Tuesday containing market share data compiled by Mercury Research. Dean McCarron of Mercury confirmed the basic numbers, which had Intel's share soaring to 80.5 percent in the first quarter, from 74.4 percent in the previous quarter. AMD's share fell in similar proportions to 18.7 percent, compared with an all-time high of 25.7 percent in the fourth quarter.

But the numbers look worse than usual because AMD was forced to get rid of excess inventory in the fourth quarter, which provided plenty of chips for its customers in the first quarter that they would have otherwise had to buy directly from AMD during the quarter, McCarron said. Throw out the inventory problems and AMD's market share still declined, but probably only by 2 percentage points or so, he said.

That's not much comfort for AMD, however. The company is reeling from an awful quarter in which it posted a $611 million loss. AMD made huge strides against its much larger competitor from 2003 until last year, picking up share and winning new customers on the strength of its Opteron and Athlon 64 processors. But Intel is much more competitive these days with its Core 2 Duo processors, and has a significant lead in manufacturing technology as well.

AMD lost share in all the categories measured by Mercury's report: desktop, notebook and server processors based on the x86 instruction set. McCarron declined to confirm the exact numbers, but JP Morgan said that AMD lost eight points of desktop market share, seven points of server market share, and four points of notebook share. Mercury usually only provides that level of detail for its private subscribers, and its numbers reflect the number of processors sold into the distribution channel, not necessarily the number of systems sold using Intel or AMD chips.

The market as a whole declined a bit more from the fourth quarter to the first than the industry would normally expect, McCarron said. There's almost always a dip in shipments coming off the fourth quarter, which is the busiest period of the year. But this year it looks like server and PC sales are slowing down from the rapid growth posted over the last couple of years.

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Mercury Research, market share, AMD, AMD Athlon 64, Intel

7 comments

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AMD lost its loyal customers
I have a rant against AMD that I need to get of my chest. I had been an AMD enthusiast since their 386 was running at 40mhz vs. Intel's 33mhz (if I remember correctly).

AMD always offered superior performance at prices *lower* than Intel's.

When AMD's first dual core products were coming out (namely the 3800), I was VERY excited and planned to buy more than one for the home (I'm definitely an enthusiast :)

Anyways, when AMD first started selling the new processors, the prices were VERY high, and I thought "OK, this is just for the initial buyers, AMD would never charge us this much over the long haul."

But, AMD *kept* it's prices up (way up) and never lowered them because they knew they had the best tech at the time. Us enthusiasts really got burned by AMD - they same guys that bought AMD even when they weren't always 'the best'.

I couldn't believe AMD was shutting out us enthusiasts - and I only bought one system (a 3800 based system) throughout the entire lifetime of AMD's dual cores - and I really didn't want to buy that one at such a high price.

Finally, Intel announced the C2D processors, and I saw the specs of those chips and the pre-released benchies and all that - of course, I got very excited and decided to wait to see what all the hype was about.

Turns out the processors were MUCH better than AMD's **AND** Intel priced them LOWER than AMD's chips for the same performance.

Well - the 'loyalty' I had towards AMD quickly went away - and I've bought 3 C3D based machines since their launch and couldn't be happier.

Suffice to say, AMD screwed us enthusiasts BADLY when they launched their first dual cores - they wanted the (short term) profit - and they got it.

Now they are being hammered and their fan base is drastically reduced because of their past behaviour.

I for one do not feel at all sorry for AMD - and will be buying Intel from this day on unless AMD has a far superior product or apologizes to us enthusiasts.

I know I'll get the typical capitalism free market economy speeches, and yes I would generally agree with them, but customer service and loyalty ALSO factor in, and that's where I believe (loyalty) that AMD screwed up REAL bad.

Anybody out there feel the same or am I just an angry soul looking for a flame rant?
Posted by DrakeLoneStar (22 comments )
Reply Link Flag
Reality
It was expected that Intel will take back the lead technologically and regain some market share. AMD's current offerings is based on an aging technology.

I bet that whenever AMD releases its new generation of CPUs offering better performance at a competitive price, you hypocrite will cowardly return to the AMD camp, with your "loyalty" restored. (Would you publicly apologize to AMD, I wonder...)

AMD -- and Intel -- is a business; they won't keep the price up just to **** us off, nor would they lower the price just for your pretty eyes. They price their products according to demand, profit marging, market share and other economic factors.

Also, 99% of buyers aren't buying AMD because of loyalty. Do you really think a *true* enthusiast would stick with AMD if Intel offers better tech at competitive price?! Of course not -- thinking otherwise is just being naive. Besides, conscientiously buying a worse product in the name of loyalty is just idiocy. Buying the best regardless of brand is normal, you know; you don't need to pretend you're loyal and try to justify your "defection" with lame excuses.
Posted by dysonl (151 comments )
Link Flag
D@m
that is serious post. I dont know that I have ever owned a AMD CPU....always thinking that Intel was better for some reason.

Then again I dont really care as long as it works. My notebook has a Core Duo...and it works great.
Posted by Lindy01 (443 comments )
Link Flag
Understand
I totally understand what you are saying. A couple of months ago I was looking at some server prices and I couldn't believe how much they were charging for the AMD ones. They were good performing but did they have to gouge people's money like that?

The desktop chips didn't come down in price either until the C2Ds were out for like 2-3 months, by that time lots of people jumped ship.
Posted by Gasaraki (183 comments )
Link Flag
Loyalty
I agree with dysonl's post on "Reality." Read it again. I was also disappointed that AMD kept their prices high for so long. If you want to know what loyalty is, talk to some Mac folks. The guys who stuck with the platform when everyone was proclaiming the company to be dead; when the mac crashed a lot more than Windows; when there was no OS X; When Apple wasn't "cool"; When the G5 was stuck at 500MHz for a year. Loyalty means sticking with your choice even if it isn't the most popular at the time.
Posted by nmcphers (261 comments )
Link Flag
Thanks 2 AMD
Thanks to AMD for great products, superior innovation, and true
competitive spirit. What makes your C2d look so good is the fact
that Intel finally spent yoir hard earned money on R+D.
Consumers are winning the price wars, Long Live the
Competitor!!
Posted by 4nchip (23 comments )
Reply Link Flag
 

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