Intel increases market share at AMD's expense

Intel's share of PC processor shipments increased by two percentage points in the second quarter of 2002 over rival Advanced...

Intel's share of PC processor shipments increased by two percentage points in the second quarter of 2002 over rival Advanced Micro Devices (AMD), according to a report out this week from Mercury Research.

Intel shipped 82.8% of the chips in the second quarter, up from 80.8% in the first quarter of 2002. AMD's share stood at 15.6%, down 2.6% from its first-quarter share.

"The second quarter was not a good quarter for anyone," said Dean McCarron, principal analyst at Mercury. Units shipped fell 10% in the second quarter, and Intel's shipments simply declined less than AMD's, he said.

The study, conducted each quarter by Mercury Research, tracks shipments of processors for desktops, notebooks, and Microsoft's Xbox gaming console.

Intel has steadily increased its share over the past 5 or 6 quarters, McCarron said, thanks to regular product announcements that get initial market attention. Intel has released several faster versions of its Pentium 4 and Celeron processors for PCs this year.

AMD has also updated its flagship Athlon processor, but lost significant ground in the second quarter as PC makers moved to sell lower-cost PCs, and McCarron sees more tough times ahead for AMD in the second half of the year. Intel has done a good job of cutting prices on its lower-cost chips, such as its Celerons, he said.

PC makers have been introducing low-cost PCs designed for less-experienced buyers, who tend to be more familiar with the Intel brand than with AMD, observers have said in the past. AMD's chips are usually priced far below Intel's, but the prices of the Celeron and AMD's Duron currently are similar, according to information on the companies' Web sites.

However, faster chips based on the company's Hammer technology are scheduled for release at the end of the year, which could boost AMD's fortunes heading into 2003. "We're not sure where Hammer will be positioned against Intel, but it could be a whole new ball game for AMD next year," McCarron said.

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