Battle Between Intel And AMD Heats Up

In case you haven't been watching, the PR and marketing teams at AMD and Intel have been working overtime trying to one-up each other with announcements and press meetings.

Intel, which lost its stranglehold on the microprocessor market long ago, announced new quad-core chips a few days before AMD's long-anticipated entrance into the quad-core market with an impressive chip of its own.

Now that AMD has entered the market with a solid offering for the server market and is expected to do the same for the desktop arena later this year, the battle for market share moves away from who has the latest technology with all the speeds and feeds and into blocking and tackling moves. And when it comes to the basics, AMD seems to have momentum on its side.

ROBERT FALETRA Can be reached at (617) 517-6070 or via e-mail at rfaletra@cmp.com.

According to market researcher iSuppli, AMD picked up 2.5 points of worldwide market share on Intel over the previous quarter. If you're concerned about Intel's health, however, you can relax—it still has a whopping 78.8 percent of the market, according to iSuppli. So rest assured AMD is likely to remain the underdog.

But along with the new product announcements (search ChannelWeb.com for more on that), the two chip makers are getting down and dirty in the market with a price battle. That severe pricing pressure isn't expected to subside anytime soon.

Given that Intel is on the losing end of the most recent market-share numbers, my bet is that it just may be the leader in dragging AMD into a price battle. Regardless of who is more aggressive, this all spells lower pricing for leading-edge chips that OEMs and systems builders are stuffing into higher-end servers.

The fact is that the resurrected and more interesting AMD of the past few years has forced Intel to behave differently in the market. Both companies have very astute managers and, as such, we can expect to see lots of innovation in product, pricing and programs in the coming months.

The attempts on the part of both companies to stay a step ahead of each other won't be limited to product specifications, however. AMD's ability to go toe-to-toe with Intel on chip design these past few years has devalued the Intel brand as the single, most powerful point of differentiation and pushed the competitive fight onto a much wider battlefield.

Now that AMD is a part of every major OEM's product arsenal, Intel is no longer able to command a price premium.

Ultimately, this battle between AMD and Intel will drive innovation and market expansion. We should be cheering for both of them.

Do you see a winner in the Intel-AMD battle?
Make something happen. Contact CMP Channel President Robert Faletra at rfaletra@cmp.com or (617) 517-6070.