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AMD's slow but steady market share gains

Fifteen percent, then 15.5 percent, and now 15.8 percent. AMD is gaining back lost ground, Mercury Research says.

Advanced Micro Devices gained a few tenths of a percentage point of market share from Intel in the third quarter, but those small victories are starting to add up.

AMD saw its market share rise to 15.8 percent, according to Mercury Research, up from its second-quarter share of 15.5 percent, which was up from market share of 15 percent in the first quarter. A year ago, AMD had market share of 15.1 percent. In other words, AMD has gained close to a point of market share in a year.

Intel, meanwhile, saw its market share decline to 81.9 percent. In the second quarter, Intel had a market share of 82.5 percent. A year ago, Intel had a market share of 83.3 percent--or 1.4 percentage points more than it has today.

Those figures include sales of chips for Microsoft's Xbox, an exclusive contract for Intel. (Like other research companies, Mercury sometimes will revise market share figures after an initial release of data, so the market share figures do not match previously published figures from Mercury, but the numbers generally only vary about a tenth of a percentage point.)

Meanwhile, the category of "other" companies saw its market share rise from 2 percent to 2.3 percent. Via Technologies, which sells microprocessors to robot makers and hobbyists, and Transmeta are the main producers in this category.

The figures do not include the PowerPC processors sold into the Mac market. (Mac sales account for about 2.5 percent of worldwide PC shipments, according to IDC.)

AMD's rise and Intel's decline reflect, to some degree, the different years the two companies have had. In the past quarter, AMD managed to make more inroads into the notebook market, according to Mercury. The company's chips have also become more popular with server buyers, though the number of server chips sold are barely a blip compared with the number that go into notebooks and desktops.


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By contrast, Intel has had to delay and cancel several products this year.

The last time AMD scored while Intel stumbled was in late 1999 and 2000. Back then, customers such as IBM and Gateway had again begun to incorporate AMD chips into their consumer PCs, because of demand for AMD's then-relatively-new Athlon chip. Intel, meanwhile, was forced to rejigger its road map because of product problems and a lack of interest among its customers for PCs and chipsets that were compatible with Rambus memory.

The market share gains by AMD during that period were more dramatic than today's. Before Athlon debuted, AMD's market share had dwindled to close to 12 percent; from late 1999 through 2001, it climbed to about 21 percent.

But there is a crucial difference between then and now, Mercury's Dean McCarron noted. In 2001, AMD was losing money, and it was on track to losing more money than it had made over its history. Now it's profitable. "In the overall scheme of things, that is a good sign," he said.

AMD, in fact, is still recovering market share it lost during the years it had to delay the Opteron and Athlon 64 and periodically clean out excess inventories. In the first quarter of 2002, it had 18.2 percent share; in the first quarter of 2003, it had 16.6 percent market share.