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AMD's Duron will miss back-to-school rush

Although it came out in June, the Duron processor won't appear in computers from major manufacturers until late September or October, an unusually lengthy gap.

The first day of school is coming, but the Duron chip from Advanced Micro Devices won't be in class.

Although it came out in June, the Duron processor, a budget version of the company's Athlon chip, won't appear in computers from major manufacturers until late September or October, an unusually lengthy gap.

The delay, which usually lasts a few weeks at most, comes as a result of a wrinkle in the product design calendar. Compaq Computer and Gateway, for instance, won't fit Duron into their product lines until the holiday buying season. IBM sells a Duron computer, but only in Canada and Asia.

"Back-to-school (computers) are out," a Compaq representative said. "The next rollout of product will be for the holiday season."

An AMD spokesman acknowledged that Duron won't be seen much until the next retail PC refresh, which typically begins in October.

Though the belated Duron onslaught is not likely to stop AMD's marketplace momentum, it may cause the company to give back market share to rival Intel. Duron is designed to compete against Intel's Celeron chip in the sub-$1,000 market.

Currently, AMD's K6-2 competes against Celeron. AMD has already begun phasing it out, however, effectively creating a marketing vacuum.

"Their market share at retail is going to look pretty ugly for a while," said Stephen Baker, an analyst at PC Data. "The only thing they will have in back-to-school is the Athlon. They will cede all of the sub-$800 market to Celeron."

The lengthy gap between the release of Duron and its appearance in brand-name desktops stems in part from a mismatch between AMD's release schedule and the design cycles at PC manufacturers.

Duron debuted in mid-June, right after most manufacturers had finished designing their computers for the back-to-school shopping season. School computers are being shipped to stores and will start appearing in ad specials in about two weeks.

Consumer computer makers usually don't update their computers again until the holiday buying season rolls around, said Matt Sargent, an analyst at ARS. Typically, those holiday computers don't start showing up until October.

"Mid-June was probably too late for the back-to-school time frame...It is surprising," Sargent said. "The brand names are absent."

A Gateway representative said the company has plans for Duron "late in the third quarter."

Duron chips have shown up in a few computers, but mostly from second-tier manufacturers or computer stores that build their own machines.

The Duron dearth could also be related to the industry-wide capacity crunch. AMD is experiencing greater demand than it can satisfy. Although it opened a new manufacturing facility in Germany, only 30 percent of that new capacity is operational, according to AMD.

As a result, the company is probably making the logical choice of dedicating its energy to making Athlon chips rather than Durons.

"They'd be crazy to say, 'Let's not make $600 chips. Let's make $150 chips," noted Peter Glaskowsky, an analyst at MicroDesign Resources.

A new 750-MHz Duron is expected to come out later this month. But even with the new chip, the old ones are not likely to become obsolete. The slowest Duron runs at 600 MHz and will still be fast enough for the budget bracket when the holidays roll around.

"Six hundred, 650 MHz will be the low end through Christmas," Baker said.