Intel Slips, AMD Gains

Intel's share fell by eight-tenths of a percentage point in the quarter ended June 30 to 82.7 percent, compared with the first quarter, according to Mercury Research. AMD, on the other hand, rose a half a point to 15.5 percent. The remaining 1.8 percent of the market went to Via Technologies and Transmeta.

AMD stole a bit of Intel's market because "ultimately, that's the only place it could come from," Mercury analyst Dean McCarron said.

"The market preference (in the second quarter) moved to very low-cost products," McCarron said. "AMD has more low-cost products than Intel, so they benefited disproportionately."

In general, AMD has been getting stronger, making "minor gains" in the last two quarters, McCarron said.

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"The shares between the two companies bounce around all the time, depending on what each company is selling and the state of the market," McCarron said.

Right now, the market is favoring low-cost PC chips, such as Intel's lower-speed Pentium 4s and AMD's Athlon XPs, giving the latter company an edge in systems sold to emerging markets such as China, Eastern Europe and India.

The more important test for the two companies will be in the third and fourth quarters, when PC sales are the highest of the year because of the back-to-school and holiday seasons, McCarron said. The company that grabs market share in the second half of the year gets a double whammy: a larger portion of much higher sales volumes and a bigger share of the consumer market, which accounts for a majority of the PCs sold every year.

When compared to the second quarter of 2003, Intel increased market share by a tenth of a percentage point, and AMD dipped by an equal amount. In the second quarter of 2003, the companies had market shares of 82.6 percent and 15.6 percent, respectively.

This story courtesy of TechWeb News