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AMD grabs more marketshare while Intel cuts earnings forecasts

Intel's loss is AMD's gain. AMD's share of the retail desktop market surged with its haul for the first seven weeks of 2006 coming in at over 80%. Intel's desktop share dropped to 21.5%. Intel has also seen losses in the notebook sector where its share has dropped to 63%.

Pricing is seen as a major factor for AMD's continued growth in the retail market. AMD-based desktops are ringing in at roughly $200 cheaper than comparable Intel systems while the notebook differetial is smaller at around $60.

Intel has also cut its forecast due to weak demand and AMD's strong showing in the marketplace:

Intel forecast revenue of $US8.7 billion to $US9.1 billion in the first quarter, down from a previous forecast of $US9.1 billion to $US9.7 billion.

It would be the second straight quarter of disappointing revenue after Intel's fourth-quarter number of $US10.2 billion fell short of Wall Street expectations.

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Charge less, idiot
By armagedon on 3/6/2006 12:37:54 PM , Rating: 2
i don't know why Intel keep charging more for their cpus. With their monstruous size they could drop their prices dramatically and strangle Amd. In the retail channel, price is king, not performance.
Are they stupid or so out of touch with reality ?




RE: Charge less, idiot
By bunnyfubbles on 3/6/2006 12:46:42 PM , Rating: 2
lol, the arm chair CEO thinks he knows whats best for the multi billion dollar company.

Its too bad intel has to report earnings to their shareholders. Selling chips at a loss would kill them as well as AMD - but only for the short term as AMD would still have investors.


RE: Charge less, idiot
By BladeVenom on 3/6/2006 1:14:39 PM , Rating: 3
They have cut prices. The cheapest Intel dual core processor is less than half the cost of the cheapest AMD dual core processor.


RE: Charge less, idiot
By Zelvek on 3/6/2006 11:19:32 PM , Rating: 2
True but for the most part the only people who will spend even that much are enthusiests and geeks like us who know that the intel dual core's suck.


RE: Charge less, idiot
By Furen on 3/6/2006 4:35:29 PM , Rating: 3
Intel is a corporation and, as with all corporations, it's first duty is to its share holders. Intel could start a price war but doing so would lower its margins dramatically (remember that costs are the same no matter what you charge for something, giving discounts only cuts into your profit margins) which would lower the net income and, in the end, lower the price of Intel's stock. If I owned a couple of billions in Intel stock and management decided to cut the value of my share by initiating a bloody price war I'd certainly be pissed off enough to replace it (the people in the board of directors are major share holders, after all). Also, predatory pricing is a good way to get destroyed in court.


RE: Charge less, idiot
By rushnrockt on 3/6/2006 9:06:58 PM , Rating: 2
"selling chips at a loss" is a hilarious statement.

So, do tell, what is the last chip that Intel sold at a loss? Besides Itanic (Itanium + Itanic for those with no humour), Intel made and makes money on every chip they have. The manufacturing costs for the most expensive of the chips that are made do not exceed $45 and considering how much they cost in retail, Intel recovers their R&D costs rather quickly.


RE: Charge less, idiot
By Furen on 3/7/2006 1:05:40 AM , Rating: 2
Yes, 45 bucks to manufacture... then there's R&D, marketing, administrative overhead, distribution... there's lots of things that can turn a profit into a loss all of a sudden, just ask AMD, it's chips are only slightly more expensive to make than Intel's).


RE: Charge less, idiot
By rushnrockt on 3/7/2006 3:07:18 AM , Rating: 2
Did you read anything besides $45 figure? Intel has not made an unprofitable chip in years(again, not counting Itanic) the $45 chips were the ones selling for almost $800. Intel recoups theirs costs on all their chips and judging by their numbers, despite "disappointments" they still seem to manage quite a profit. And yes, profit is calculated AFTER R&D, marketing, admin and bribes.


RE: Charge less, idiot
By Spoonbender on 3/7/2006 6:23:41 PM , Rating: 2
Yeah, but if you actually read the post you answered, he didn't say Intel usually sells chips at a loss. Just that they could lower their prices further to undermine AMD.
I fail to see the relevance to how much they've *traditionally* earned on their chips.


RE: Charge less, idiot
By rushnrockt on 3/7/2006 6:42:51 PM , Rating: 2
"lol, the arm chair CEO thinks he knows whats best for the multi billion dollar company.

Its too bad intel has to report earnings to their shareholders. Selling chips at a loss would kill them as well as AMD - but only for the short term as AMD would still have investors. "

This statement quite clearly implies that lowering prices for Intel would mean they will be selling it at a loss.

Of course, it's possible that you just didn't understand which post I was replying to...


RE: Charge less, idiot
By masher2 (blog) on 3/7/2006 8:49:35 PM , Rating: 2
> " manufacturing costs for the most expensive of the chips that are made do not exceed $45"

I don't know who told you such nonsense, but its quite incorrect. Intel's average manufacturing cost per chip is in the $40 range...but that includes the small-die high-yield chips such as the Celeron and the single-core P4s. The cost of their large-die, low yield cpus is several times that figure.


RE: Charge less, idiot
By rushnrockt on 3/7/2006 9:24:16 PM , Rating: 2
And you pulled that nonsense out of where yourself? P4 3.4EE cost $45 to produce at the beginning of its production, and that is by no means a simple chip. Celerons cost below $20 to produce. Either way, the argument was not about that, Intel still has room to drop the prices, but they like their lofty profits, and I can't blame them.


RE: Charge less, idiot
By masher2 (blog) on 3/7/2006 11:17:32 PM , Rating: 2
> "P4 3.4EE cost $45 to produce at the beginning of its production, and that is by no means a simple chip. Celerons cost below $20 to produce"

Sorry, but you just don't understand the basic concepts here. Die size has a nonlinear effect on manufacturing cost. Let's look at the two examples you gave. A Celeron D has a die size of 112 mm2, whereas the die of an Extreme Edition is 206 mm2. So, assuming a 100% yield rate, an EE would be 84% more expensive to manufacture.

But yield rates are never 100%, and they are dependent on both die size AND clock rate. Intel's yield rates are top secret, but lets assume a rate of 75% for Celeron D's. Factoring in only the areal die differential, that makes the yield on an EE (0.75)^1.84 = 58%. That lower yield raises the manufacturing delta to (1.84)(.75/.58) = 138% higher cost.

But we've forgotten the most important factor-- clock rate. On the same manufacturing node (whether you assume 65 or 90nm) the yields for 2.4 ghz chip are far higher than they are at 3.4 ghz. If you doubt this, take any batch of 100 Intel chip and see how many can succesfully be overclocked another 1000 mhz...and still have enough remaining headroom to pass Intel QC.

Even if we assume VERY optimistically that 50% of such chips pass this speed binning, that drops our EE yield down to 30%...and that raises the cost differential to 360%. Assuming a $20 Celeron D, that puts an EE at $92.

The fact is, yields on the EE are very low, most likely in the sub 20% range. Large die sizes and high clock rates are a bad mix, manufacturing wise. The only estimate I saw for EE manufacturing cost put them in the $150-$200 range....still a very profitable chip for them, but far outside this mythical $45 figure.


RE: Charge less, idiot
By Spoonbender on 3/7/2006 6:23:43 PM , Rating: 2
Yeah, but if you actually read the post you answered, he didn't say Intel usually sells chips at a loss. Just that they could lower their prices further to undermine AMD.
I fail to see the relevance to how much they've *traditionally* earned on their chips.


RE: Charge less, idiot
By smitty3268 on 3/6/2006 2:13:58 PM , Rating: 3
If they forced AMD into bankruptcy, they would instantly be declared a monopoly by every government on earth. By letting a scrappy competitor hang around with miniscule actual share (and thus threat), Intel can keep raking in the billions of dollars of profit without any threat from the free market or legal side of things.


RE: Charge less, idiot
By NullSubroutine on 3/6/2006 11:19:59 PM , Rating: 2
this is NOT intels strategy.


RE: Charge less, idiot
By zeppelinrox on 3/7/2006 1:31:49 AM , Rating: 2
in case you haven't been keeping up, intel is in trouble. they have already cut their projected revenue figure TWICE and will likely LOSE money this year.
Not exactly making billions in profit any time soon.


RE: Charge less, idiot
By masher2 (blog) on 3/7/2006 9:04:36 AM , Rating: 2
> "this is NOT intels strategy."

It most certainly is. Intel could put AMD out of business almost overnight...but it would be a very poor move tactically.

> "in case you haven't been keeping up, intel is in trouble....Not exactly making billions in profit any time soon.

God, where do people get this nonsense? As of their last reported financial statement (Q4 2005), Intel had RECORD quarterly and annual revenues, and earned $2.5 B in profit. That was for a single quarter...for the entire year, profit was $8.7B...up SHARPLY from the year before.

The only cuts at Intel are in projected revenues. They are still making a healthy profit, and will continue to do so for the foreseable future.


RE: Charge less, idiot
By Questar on 3/7/2006 10:46:39 AM , Rating: 2
quote:
likely LOSE money this year.


There is no way short of a global disaster that Intel is going to post a loss this year.


Why?
By Griswold on 3/6/2006 12:44:51 PM , Rating: 2
Why do people feel the need to point out the obvious all the time? It's retail alright. Same happened last time AMD beat Intel on the retail market in late 2005, smartpants came jumping out of the bushes, telling everyone who already knew it anyway, that its retail and not overall market share...

Much more impressive is the fact that from last quarter firgures, which saw AMD at 50%, they made a nice jump to 80% retail market share. THAT is interesting.




RE: Why?
By TomZ on 3/6/06, Rating: -1
RE: Why?
By Griswold on 3/6/2006 1:01:53 PM , Rating: 4
How about we stick to the truth and blame the inability to read more than the big fat letters at the top.


RE: Why?
By TomZ on 3/6/06, Rating: -1
RE: Why?
By TomZ on 3/6/2006 1:32:48 PM , Rating: 2
Kudos to DailyTech for correcting their headline!


RE: Why?
By Questar on 3/6/06, Rating: 0
RE: Why?
By Griswold on 3/6/2006 5:24:30 PM , Rating: 2
Why not do me the favor and stop reading (and thus posting) here, if you dont like it? Geez, the kids these days, they just dont know what they want.


RE: Why?
By Questar on 3/7/2006 10:49:32 AM , Rating: 2
quote:
Why not do me the favor and stop reading


Well, obviously you really wouldn't want me to stop posting. After all, my posts are meaningful enough to you that you reply to them.

You could always ignore me if you don't like what I have to say.


RE: Why?
By Zelvek on 3/6/2006 11:26:07 PM , Rating: 2
welcome to America's media none of itis news!


Stocks show otherwise
By OCedHrt on 3/6/2006 3:15:11 PM , Rating: 2
The funny part is, INTC stock is down barely 0.1% since adjusting their earning estimates.

AMD is down a whopping total of 7%+ for being AMD.




RE: Stocks show otherwise
By MDE on 3/6/2006 3:41:44 PM , Rating: 2
Intel's share price: $20.25
AMD's share price: $39.44

I think AMD is a wee bit overvalued and probably needs to come down a bit anyway.


RE: Stocks show otherwise
By Furen on 3/6/2006 4:28:17 PM , Rating: 2
AMD may be a bit overvalued but not because of the share price. Though AMD's share price is almost double of what Intel's is, Intel has a whole lot more shares outstanding, so it's market cap is also much higher (~120B compared to AMD's ~19B).


RE: Stocks show otherwise
By NullSubroutine on 3/6/2006 11:25:04 PM , Rating: 2
yah the question is if that is 1 share vs 1 share comparison. im not a economic guru by any means, but there is something where the stock splits and the price of the 'stock' decreases?

how i think it works lets say for hypothetical, 1 stock in the company gives you 1% control of company. lets say that stock price is $100. now, if that price goes up to $150 the company splits the stock, 75/75 but you get .5% of stock now.

someone correct me on this?


RE: Stocks show otherwise
By Furen on 3/7/2006 1:09:23 AM , Rating: 2
Huh? If I own 1 share that I bought at $100 and it goes up to $150 now I own a share that is worth $150. If it splits then I own TWO shares that are worth $75 EACH, so the proportion of ownership stays the same. Splits don't dilute ownership, they only make the shares more affordable.


RE: Stocks show otherwise
By masher2 (blog) on 3/7/2006 9:07:39 AM , Rating: 2
> "yah the question is if that is 1 share vs 1 share comparison. im not a economic guru by any means, but there is something where the stock splits and the price of the 'stock' decreases? "

Not sure exactly what you're asking. Market cap is calculated simply: share price x outstanding shares. It's not a 1 to 1 comparison.

When a stock splits, the per-share value declines (assuming it wasn't a reverse split, of course). The market cap, though, remains unchanged.


SW
By Sunbird on 3/6/2006 12:19:00 PM , Rating: 4
The Rebel Alliance (AMD) has bested The Empire (Intel), but we can be sure The Empire will strike back...




RE: SW
By Connoisseur on 3/6/2006 12:27:59 PM , Rating: 2
Heh good one. The report makes it sound like AMD is absolutely dominating Intel. Intel still has some thing like a 75-80% overall marketshare right? Besides, the big money is in workstation/server environments where corporations will spare no expense to purchase pricey machines. I'd much rather see AMD dominating in this environment; they've still got a ways to go.


RE: SW
By Viditor on 3/6/2006 12:36:29 PM , Rating: 2
Intel has 76% of the worldwide marketshare...
It's the server/workstation area where AMD has made their biggest gains, followed by notebook and then desktop.


RE: SW
By AnnihilatorX on 3/7/2006 7:33:09 AM , Rating: 2
AMD has been gaining momentum in servers and workstation pretty like desktop sector

The overall market share consist of mostly older PCs when Intel dominated


Oh yes
By Runiteshark on 3/6/2006 10:36:39 PM , Rating: 2
Oh yes, lets all fellate AMD as they rape their only venues of profit.

Since their advertising is laughable, they are nicely keeping their prices high.

Seriously, back in the old days of Socket A, were the prices good. Now that they dominate, they raise their prices. Everyone who knows something, agrees with me. There is no excuse to have the lowest chip (the 3000) at over 140 bucks.

Hell, a Dual Core Intel processor is now 150 bucks!

I wish AMD would get back with the program, or Intel starts kicking AMDs ass again so AMD can get its ass back in gear (unless AM2 on DDR2-800 changes that much) because these lame clockspeed increases are old.




RE: Oh yes
By rushnrockt on 3/7/2006 4:54:38 AM , Rating: 2
"Now that they dominate"

You base that on just a couple quarters of success in retail market? And your argument still does not hold considering that AMD systems sold by PC manufacturers are indeed cheaper than Intel's equivalent. Enthusiasts that "know something" are not the main force behind buying new computer chips, so your complaint is simply misguided. You can fellate yourself all you want, but you are not their only venue of profit.


RE: Oh yes
By Runiteshark on 3/7/2006 8:57:54 AM , Rating: 2
Correct, however a majority of enthusiasts will be going for their systems.

The AMD systems are cheaper? Go look at the value Intel boxes at walmart and other stores and try to tell me that again with a straight look on your face.

You trying to tell me that say the current generation of socket 939 chips is about the same as the Socket A (Think the 3200+ barton) being the same "performance" chip as the higher end Dual core and 4000+ SD core chips.

Are their prices even close? Nope.


RE: Oh yes
By rushnrockt on 3/7/2006 3:28:39 PM , Rating: 2
First off, like I said before, you can felate yourself all you want, but you and people like you (enthusiasts) are not the ones making money for either AMD or Intel.

As for the system prices, obviously you did not read the article or the numerous comments here about AMD systems being cheaper and more predominant throughout many stores. Consumers voted with their dollar. Your "performance" comment is irrelevent and has nothing to do with the sales of the majority of the computers, which are fast enough for just about everything regular (read: non-enthusiast) people do.
So please, read the article, do research on the complete PCs prices and stop thinking that you are the deciding factor in AMD's or Intel's success.


RE: Oh yes
By masher2 (blog) on 3/7/2006 9:10:00 AM , Rating: 2
> "Hell, a Dual Core Intel processor is now 150 bucks! I wish AMD would get back with the program"

The Intel "program" is 300mm wafers at 65nm. AMD -cannot- compete on price at the moment, plain and simple. Their manufacturing costs are just too high.


trap
By BUBKA on 3/6/2006 12:26:38 PM , Rating: 2
it's a trap!




RE: trap
By Ackbar on 3/6/2006 4:45:49 PM , Rating: 2
quote:
it's a trap!


Umm... that's my line...


RE: trap
By Howard on 3/6/2006 10:33:27 PM , Rating: 2
hahaha


Analysts?
By Questar on 3/6/2006 1:31:51 PM , Rating: 3
This is a report from an "Analyst".

Before everyone spooges all over themselves on this one, remember this.

Unless you're a hypocrite of course...




RE: Analysts?
By Furen on 3/6/2006 4:39:01 PM , Rating: 3
This is not a prediction by an analyst, it is just a compilation of the sale numbers across the retail market. There is, of course, some inaccuracy depending on how you gather this information but for the most part the different market share numbers from the different firms are pretty much in line.

Now, if an analyst said "AMD will hold 99% of the retail market by the end of the year" it'd be another thing altogether.


competition and stock prices
By willys on 3/6/2006 3:45:20 PM , Rating: 2
Okay, item 1: AMD stock is up about 250% over the past year while Intel is down about 30%, so quite a bit of this news has already been priced in.

Item 2: Intel can't try to drive AMD out of business because of an ongoing anti-trust lawsuit, which has already forced Intel to cut back on some nasty practices, such as giving discount prices to buyers only if they promised not to do business with AMD.




RE: competition and stock prices
By armagedon on 3/6/2006 7:25:48 PM , Rating: 2
Intel has always taken fat margins on it's chips. There is nothing illegal about lowering their prices as long as it's not below cost(dumping). They have the production facilities to do that. Shareholders wouldn't be more happy to see Intel sell more chips.


RE: competition and stock prices
By Viditor on 3/7/2006 12:49:15 AM , Rating: 2
Intel's margins have been decreasing...and while they certainly can try to reduce prices to regain marketshare, this is very dangerous for them as it's always extremely difficult to increase them again once you've regained the marketshare.
Remember the years of bad press AMD received when they stopped undercutting Intel's price on every single chip? It's taken several years and one hell of a performance lead for AMD to slowly increase it's ASP on chips.


chipset...
By fanbanlo on 3/6/2006 2:29:03 PM , Rating: 2
YES! AMD all the way~~~

But doesn't Intel still produce better chipset overall than nVidia's nForce or ATI's Xpress?




RE: chipset...
By retrospooty on 3/6/2006 3:34:44 PM , Rating: 3
Thats a tough call... The platforms are so different now. Nforce and ATI's AMD chipsets dont need memory controller because its built onto the A64 core, with that said, Intel's are historically better at memory performance, but the A64's internal controller ruined that dominance.

The point is, you dont buy a chipset, nor can you run a chipset, you run a platform. These days the AMD A64/Nforce platform kicks Intel's all over the place.


AMD everywhere
By maverick502 on 3/6/2006 12:34:43 PM , Rating: 2
It's quite amazing. Next time you are in Best Buy (or probably any retail store)take a look at the computers they are selling. Most desktops are AMD powered, it's very impressive.




RE: AMD everywhere
By Chapbass on 3/7/2006 2:49:15 AM , Rating: 2
Yep. I work at the ames IA BB, and we push the AMD Machines constantly...the two biggies (for us at least) are two HP machines with a64 3700+ and 3800+'s in em....we probably sell more of those machines than all the others combined (desktops at least)....with 3rd place being the dual core 3800+ x2 gateway...

I cant remember the last time i sold a p4 or pentium D based computer... : \


Retail Segment
By Doormat on 3/6/2006 12:38:12 PM , Rating: 3
Note that this is only the retail segment - Best Buy, etc. This does NOT include Dell which only sells Intel chips. It is good news for AMD, but its not like they've all of a sudden flipped positions overnight - Intel still has around 80% of the marketplace of all CPUs sold.




ummm Math?
By phaxmohdem on 3/6/2006 5:57:41 PM , Rating: 1
Amd I missing something?

AMD > 80%
Intel 21.5%

Total > 100% WTF? where are these numbers coming from, and how do we know Intel got exactly 12.5% while there is no exact figure for AMD?




RE: ummm Math?
By TomZ on 3/6/2006 9:09:33 PM , Rating: 2
Disclaimer: Totals may not add up to 100% due to rounding.

Seriously, the original article has the correct figures. DailyTech has a mistake in the article.


..
By Phantronius on 3/6/2006 12:23:03 PM , Rating: 2
The force is strong with this one......




Liquid Schwartz
By RunLikeHell on 3/6/2006 12:40:50 PM , Rating: 2
May the Schwartz be with you...AMD.




Intel losing share
By Mithan on 3/6/2006 1:01:27 PM , Rating: 2
I dont really care about either company, as they both make good chips.

However, AMD is just better price/performance wise right now, making them the better choice for me, period.

If Intel wants me to buy their CPU's, then they need to get back on top at a reasonable price. It's that simple.




Influence is gaining
By Regs on 3/6/2006 6:28:27 PM , Rating: 2
Yes it's not the overall market. However going from 40-50% to 80% is going to influence the market in more ways than one.

Keep up the good work AMD. I hope however you are being secreative about your future technologies on purpose, other than having no answer to what Intel plans to have in store for them in upcoming months.




.
By bbomb on 3/6/2006 9:04:56 PM , Rating: 2
How long before Dell finally bgins selling AMD systems? They can only ignore the market and consumers for so long beofre they finally have to give in due to the pressure of their competitors gaining market share with AMD systems.




Good one Intel!
By xtremejack on 3/6/2006 11:21:52 PM , Rating: 2
I myself would have bought Presler if the mobo that it sat on would be Conroe-ready. Maybe not the best mobo for Conroe, but atleast Conroe-ready. I bet Intel's chipset strategies are now paying off, by losing 20-30% extra market share. The loss would have been lesser if they did the Presler platform right.




compusa sale
By ElFenix on 3/7/2006 4:05:05 PM , Rating: 2
i wonder what percentage of the retail sales were SR1610/1710s from compusa back in january?

still waiting on my rebate...




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