Intel just can't get a break. While the market braces for some potentially tough news in Intel's earnings report Tuesday and the company grapples with a string of recent glitches, Advanced Micro Devices has taken another swipe at the struggling chip giant. Sunnyvale, California-based AMD on Tuesday released new processors-the 1.2-GHz Athlon and the 800-MHz Duron-that will appear in systems from Compaq Computer, Gateway and Hewlett-Packard.Micron Electronics sells a Duron system at Best Buy stores, and IBM sells some Duron PCs directly. As previously reported by CNET News.com, the chips had been on sale well in advance of their official release. The move allows AMD to grab some market share from its rival, as Intel deals with a delay delivering its Pentium 4 processor and a recall of its 1.13-GHz Pentium III chips. Price, however, has emerged as a problem for both companies.
Microprocessors from both companies have been dropping in price in recent weeks, due partly to slower than expected PC sales. AMD CEO Jerry Sanders also said last week that the company would likely throttle Duron sales in the fourth quarter to avoid a price war in the budget segment. In what has been a tense race of clock speed, AMD can, for now, claim to have the fastest processors on the planet.
The Pentium III recall "hurt the image of Intel a lot. And now AMD is ahead of the game, ahead of the curve, and that's huge, really important," said Technology Business research analyst, Mr Humberto Andrade. To high-end users demanding performance, whether from chips, cars or bicycles, "image is important," Mr Andrade said. "When you've won the race, it looks like you have the best technology, and that boosts the sales of low-end chips." AMD released its Duron processor in June, but has seen limited interest in the budget chip.
With Tuesday's chip launch, HP becomes the first major PC maker to move aggressively to the processor. "AMD consistently beat Intel, and suddenly the whole market and the end users start to realize Intel isn't the only choice. That's huge," Mr Andrade said. AMD certainly thinks so. "We're seeing strong demand for all of our products," said Mr Mark Bode, divisional marketing manager for AMD. The 1.2-GHz Athlon and 800-MHz Duron are available, respectively, for $612 and $172 in quantities of 1,000. Other Athlon prices in thousand-unit lots: 1.1 GHz, $460; 1 GHz, $350; 950 MHz, $282; 900 MHz, $215; 850 MHz, $193. The 750-MHz and 700-MHz Duron are $112 and $88, respectively, in lots of 1,000.
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