The chipmaker unveiled its Athlon 64 processor on Tuesday at a San Francisco event hosted by CEO Hector Ruiz. Along with added performance, the chip offers PC buyers the option of upgrading to 64-bit software--a feature Intel's Pentium doesn't offer. Such software, which offers improved graphics capabilities, will start hitting shelves later this year.
Analysts have said that in order for AMD to set itself apart in the PC processor race, it needs two things: competitive performance and something its archrival doesn't have.
"AMD needs to demonstrate that it's competitive with Intel and at the same time is offering some differentiation--one of the things it is doing through 64-bit capability," said Dean McCarron, analyst with Mercury Research.
On the performance front, sources familiar with AMD's plans said the Athlon 64 will run at higher-than-expected clock speeds, a measure that will help against Intel.
That leaves the 64-bit angle.
The payoff from upgrading to 64-bit software involves higher performance from applications such as video-editing programs, along with more "cinematic" graphics for games. The improvements come mainly from a 64-bit computer's ability to use much more RAM than 32-bit computers can.
AMD's Athlon 64 chip gives PC buyers the option of improving graphics by upgrading to 64-bit software--a choice Intel's Pentium doesn't offer.
Analysts have said AMD needs something its archrival doesn't have. Though some question the mainstream appeal of gaming-oriented, 64-bit capabilities, AMD argues that since Athlon 64-based systems will cost about the same as rival 32-bit systems, consumers will think, "Why not?"
In its Athlon 64 marketing efforts, the company will tout a "buy it now, upgrade it later" approach. People who buy an Athlon 64-based PC now will pay about the same price as they would for a comparable 32-bit system, but they'll have the ability to upgrade to new 64-bit software.
A person could purchase an Athlon 64 desktop--all of which will come with 32-bit software and operating systems initially--then, when needed, upgrade to a 64-bit version of Microsoft's Windows XP and still run the 32-bit version of Microsoft Office and other everyday applications, while also making the switch to 64-bit games or other software.
On Tuesday, Microsoft announced the availability of a beta, or test, version of its Windows XP operating system for 64-bit AMD chips, such as the Athlon 64. The software giant said it would ship the production version of the operating system in the first half of 2004.
"This is the first time we have 64-bit capability on the (Windows PC) client side," said Rich Heye, general manager for AMD's Microprocessor Business Unit. "We allow our customers to migrate to 64-bits when they want to, when there's a need. They can get that killer application, and whatever else they're using--Office or what have you--can stay the same."
And to those who argue that not all PC buyers are overly concerned with graphics, Heye has this to say: "Why wouldn't you buy 64 bits? You're going to be paying no more than for it than a 32-bit system."
Besides, gamers may represent a small percentage of PC buyers, but because they demand cutting-edge technology, their business is highly profitable, making them a popular target for chip and PC manufacturers.
To aid AMD's 64-bit argument, three or four major game makers are working on 64-bit titles. One company, Epic, has already demonstrated a 64-bit version of its Unreal Tournament game. Several other companies are working on or evaluating versions of their editing software for Athlon 64, Heye said. In addition, several versions of the Linux operating system will be available.
"We want to get away from blocky and chunky to cinematic (graphics), to get that realism on your desktop," Heye said. "You might not get there in 2004, but you'll never get there unless someone puts down the baseline technology."
Off to the races
Because the Athlon 64 is also expected to offer competitive performance running 32-bit software, the chip promises to add a little heat to the processor performance race.
Ironically, it was Intel that struck first. Last week, the chipmaker announced its plans to offer the Pentium 4 Extreme Edition, a version of its 3.2GHz Pentium 4 chip with an additional 2MB of cache memory. A processor cache is a performance boosting technique that provides a pool of data storage near the processor core.
AMD would not share any specifics, such as model numbers, clock speeds or prices, for this story, but the company did share its take on performance.
"The Athlon 64 processor for (PC) clients, on a performance level, is looking great," Heye said. "We've been benchmarking ourselves against the (Intel) Pentium 4 3.2GHz, and we believe we're extremely competitive with that. We think we'll do well against both Prescott (the next generation Pentium), when Intel announces it, and the 3.2GHz (Pentium 4) Extreme Edition."
Indeed, the two Athlon 64 chips--the Athlon 64 FX and the Athlon 64 Model 3200+--will offer higher-than-expected clock speeds, sources said. Informationsuggested the Athlon 64 would start out at 1.8GHz.
The Athlon 64 FX, a new superpremium brand, will be positioned for absolute top-of-the-line PCs--not unlike Intel's Pentium 4 Extreme Edition. The first Athlon 64 FX, the FX-51, will run at 2.2GHz.
The Athlon 64 Model 3200+, a more mainstream chip, will run at 2GHz, the sources said.
Although Intel's Pentium 4 offers as much as an additional 1GHz of clock speed, AMD argues that its Athlon 64 can perform as well or better by doing more work per clock cycle.
Both new Athlons are expected to share 1MB of level 2 cache, along with a host of other improvements, including a built-in memory controller and a front-side bus that uses HyperTransport to bridge data between the chip and chipset.
If you build it, they will come
A number of PC manufacturers, located around the world, will offer the Athlon 64 almost immediately. Collectively, they are expected to launch 100 Athlon 64 desktops and notebooks in the first month of the chip's availability, Heye said.
AMD would not say who the manufacturers are, but companies like Alienware, which cater to enthusiasts, are likely to offer Athlon 64 systems almost immediately. Others, like Hewlett-Packard, are expected to offer the chip at a later date.
The Athlon 64 will follow AMD's typical manufacturing ramp. Tens of thousands of chips will be made during its first quarter of production, while hundreds of thousands will follow in its second quarter and millions in its third. As production increases, AMD will lower the price and spread the chip to more and more desktop and notebook PC models in lower price bands. AMD's Athlon 64 and Athlon XP chip will coexist for some time, with the latter going into less-expensive PCs.
AMD would not comment on the pricing of the initial systems. However, price tags are likely to start at somewhere north of $1,000 for a basic desktop and could scale past $3,000 for a well-outfitted machine.
Costco on Tuesday advertised a desktop from manufacturer Northgate containing an Athlon 64 3200+ chip, 1GB of RAM, a 160GB hard drive and a DVD burner for $1,399.
Mercury's McCarron said the Athlon 64 will be especially appealing to people who are already fans of AMD's products.
"This is...a very important product for AMD, because future products, going into 2004, are based on it. It needs to be successful over the long haul," McCarron said.