AMD shuffles numbers with new Athlon

As previously reported, the Athlon XP offers a number of features not found on previous Athlon desktop processors. For example, the chip consumes less power than current desktop Athlons, allowing PC makers can to insert the chip into more compact computers. Compaq, Fujitsu, Micron and NEC all plan to come out with PCs featuring the new chip.

Compaq, for example, is offering the Athlon XP in build-to-order models in its Presario 8000 desktop line.

AMD is planning an event later Tuesday in San Francisco to announce the new products, twinned with an appearance by AMD Chief Executive Jerry Sanders.

AMD issued a short notice that Sanders would be on hand to announce a new strategic initiative and "formally launch a new AMD product."

It will call this new effort the True Performance Initiative. The new initiative will seek to educate consumers that megahertz is not the only measure of processor performance.

However, the chipmaker's only problem with the launch is megahertz. AMD has downplayed the usual measurement of chip speed in favor of a new naming plan that implicitly compares its chips with those from competitor Intel. The 1800+ Athlon XP will roughly provide similar performance to Intel's 1.8GHz Pentium 4, according to benchmark testers and analysts. The 1800+ Athlon XP also costs $252 in volume, $4 less than volume amounts of the rival Intel chip.

But the 1800+ runs at 1.53GHz. Similarly, the 1700+, 1600+ and 1500+ Athlon XPs run at, respectively, 1.47GHz, 1.4GHz and 1.3GHz.

For years, consumers have used megahertz as one of the primary yardsticks in purchasing decisions. Attempts by Cyrix and other companies to get consumers to focus on other performance measurements have failed in the past.

With Intel's Pentium 4 running at 2GHz and going to 2.2GHz at the end of the month, AMD could find itself in an uphill battle in terms of perceived performance and price.

"The question is whether AMD can communicate the model number to the public," said Kevin Krewell, an analyst with the Microprocessor Report. "I don't think OEMs (computer makers) are going to pay for the number-rated parity. They will pay for megahertz."

To combat megahertz dependency, the company has come up with the new brand and will engage in a massive consumer education project.

As part of the campaign, it commissioned Andersen Consulting to do a benchmark test. The results, posted on AMD's Web site, support its assertion that the Athlon's overall performance belies its clock speed.

If anything, though, the company's best weapon might turn out to be the reputation it has built with Athlon. Since the chip debuted in 1999, Athlon has helped transform AMD from a company that sells budget processors to a designer of performance processors. The chip has won numerous awards and allowed the company to boost its market share past 20 percent.

AMD also received support from Microsoft, which said in an announcement that it would help market the Athlon XP in conjunction with its new Windows XP operating system. Chipset maker VIA Technologies also announced support for Athlon XP as did graphics chipmaker ATI Technologies. Memory maker Samsung and several others also announced support for the new chip and strategy.

Originally due in the first quarter at 1.2GHz, the Athlon XP contains a number of silicon-level enhancements.

"The big problem they were running into with the old version was power," Krewell said. The current desktop Athlons consume about 76 watts of power. "It takes a big heat sink" to cool these computers, Krewell said.

The chip also includes the full complement of SSE multimedia instructions found on the Pentium III for the first time. These instructions effectively allow a processor to perform similar calculations on several pieces of data at once.

Additionally, the new Athlon contains a pre-fetch function in its memory cache that allows the chip to recognize patterns and automatically grab the data needed by the processor before it's actually needed. This way the chip doesn't have to wait for the data when it comes time to perform an operation.

By supporting Intel's SSE instructions, AMD's own 3D Now instructions for multimedia performance fade into the past, Krewell said. "There's no reason for software developers to write for 3D Now," he said.

The Athlon XP has been a chip of many names. Originally code-named "Corvette" in 1999, the company switched to "Palomino" after being contacted by General Motors.

A version of the Athlon XP was first marketed for notebooks in July under the name "Athlon 4." The same chip core has also appeared in a budget Duron processor from AMD.

The chip comes out amid a devastating price war between Intel and AMD that began in March. For the third quarter ending Sept. 30, AMD said it will report a pro forma loss of between $90 million and $110 million, or 26 cents to 31 cents a share. That projected loss doesn't include restructuring and other charges, expected to be between $80 million and $110 million. AMD said last month it would lay off 15 percent of its work force.

The 1700+ will cost $190 and the 1600+ will cost $160 in volume quantities, while the 1500+ costs $130.

Compaq's Presario 8000, when fitted with an Athlon XP 1500+, starts at $1059, including a 17-inch monitor. A machine fitted with the Athlon XP 1800+, 128MB of RAM, a 40GB hard drive, CD-ROM and 17-inch monitor comes in at $1208. The addition of an extra 128MB of RAM, raising the total to 256MB, and a CD-RW drive, increases the price only $49.

News.com's John Spooner and Reuters contributed to this report.