Amnesty pays off as Intel and AMD prosper

Amnesty pays off as Intel and AMD prosper

As price war between IT giants abates, both firms see an increase in their
market share

Intel and AMD have managed to increase their global market shares in the microprocessor space in quarter three, largely thanks to a ceasefire in their ongoing price war.

According to iSuppli’s figures, Intel accounted for 78.7 per cent of the market, up 0.3 per cent from 78.4 per cent in the second quarter. AMD, however, realised the biggest growth with a 0.6 per cent rise to 13.9 per cent, up from the second quarter’s 13.3 per cent. In turnover terms, both firms accounted for almost 93 per cent of global microprocessor turnover in the third quarter, an increase of two per cent on the same period in 2006.

iSuppli maintained that a cessation of the brutal price war between the firms helped them gain share at the expense of their smaller rivals, whose collective share dropped from 8.2 per cent in the second quarter to 7.4 per cent in the third.

“The combination of strong PC and server demand, combined with stable microprocessor prices, led to a prosperous quarter for both Intel and AMD,” explained Matthew Wilkins, principal analyst at iSuppli.
“Pricing trends were influenced by many variables, including the consistent strength in computing markets, Intel’s rapid migration to its new Core 2 architecture microprocessors and the increasing penetration of multi-core products in the market.”

The market overall benefited from strong sales of computers in the third quarter, with sales of desktops, notebooks and entry-level servers amounting to 68.1 million units - a 13.8 per cent jump on the same period last year and up almost 10 per cent on the second quarter this year.

Although the pricing battle is on hold, Wilkins predicted that competition will remain fierce.

“AMD’s launch of Barcelona and Barcelona-derived products gives the company a stronger portfolio with which to compete. And with Intel shipping its products based on its new 45nm manufacturing process, neither company is resting on its laurels,” he concluded.

Hector Ruiz, AMD’s chief executive, was on fighting form this week, claiming during a recent trip to India that rival Intel was not an innovative company.

“If you look at what major innovations have occurred in computing technology in the past five years, every single one of them came from AMD,” Ruiz claimed. “Intel is trying to catch up with us in that respect.”