Advanced Micro Devices (AMD) continues to make headway into the PC space as vendors look for processor options. As the PC space shifts into more of a commodity market, availability of lower priced components is paramount. And just as we witnessed with Dell in the PC space with strong price competition when it first entered the fray, so the market is witnessing in processor space. AMD is setting records with its price breaks, some of which came before the ATI purchase, some of which came at the time, and some of which followed the acquisition.
Entering into a price war is certainly a critical stage of any market’s development, and Intel has been forced to re-examine its pricing strategy. However, on a North American front, Intel continues to ship strong inventory into the reseller channel. While the shift to AMD enables vendors to offer multiple platforms to its new and existing customer base, vendors continue to offer Intel technology.
In the battle for market share, AMD has boosted its marketing and advertising revenue, including advertisements in magazines and billboards. These initiatives are often done in partnership with PC vendors. AMD chipsets are now visible on the large stage. In many ways, AMD is mimicking Intel’s strategy. Of course, imitation is the highest form of flattery.
Intel continues to push ahead with product development, especially on the mobility side where it continues to dominate the market. Its mobile chipset, codenamed Santa Rosa, is set to hit stores in May. One of the advancements made on the current Centrino platform is Dynamic Acceleration, which proposes to raise the clock speed of one processing core about the guaranteed frequency level, once the second core has slowed down. This enables the cores to operate at optimal levels, while enabling a rest period. This helps to prevent the common occurrence of overclocking, whereby users raise the frequency of the processor beyond its designed levels. This addresses the ever-important need to address power consumption and cooling capabilities.
AMD has made strong inroads in the desktop and in the server business. It continues to grow its presence within the notebook space. This activity doesn’t take away the reality that the PC market is rapidly converting into a commodity market: one where price and availability are critical to its success.
The competition between AMD and Intel has contributed to aggressive pricing, promotional and production opportunities for assemblers and resellers. With the exception of the Canadian reseller market opportunities, the market experienced a similar shift with Dell. Vendors such as HP continued to develop and bring innovative products to market.
The battle will continue, maybe even intensify, with time. Just as we saw with Dell, options for the customer will continue to multiply.
Michelle Warren is senior analyst, Indaba division, at Info-Tech Research Group of London, Ont.
