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IBM drops AMD in U.S., Europe

Big Blue quietly discontinues using Advanced Micro Devices' chips in PCs sold in North America and Europe, as the battle for market share between AMD and Intel intensifies.

IBM has quietly discontinued using Advanced Micro Devices' chips in PCs sold in North America, as the battle for market share between AMD and Intel intensifies.

Big Blue continues to use AMD chips in computers sold in Asia, but an IBM spokesman confirmed Monday that the company has dropped AMD's Athlon and Duron chips from its desktop lineup for the United States and Canada. Athlon-based PCs in Europe are also going by the wayside.

Unlike Compaq Computer and Hewlett-Packard, IBM has not actively promoted AMD's chips. IBM first adopted Athlon and Duron for U.S. computers last September but offered the chip only as a build-to-order option for consumer models. In Canada, IBM offered two computers with AMD chips.

Still, the IBM alliance was seen as a symbolic victory for Sunnyvale, Calif.-based AMD. Historically, IBM had relied primarily on Intel processors.

In the late 1990s, IBM and Cyrix cooperated on a processor that competed with Intel's chips. IBM's semiconductor division marketed the chip under the IBM brand. Nonetheless, IBM put its own chip in only a few low-end boxes in the United States.

IBM also used AMD's K6 chips in a few computers in the late 1990s, but usually in its cheaper models only.

The decision to drop AMD came as part of an effort to streamline its consumer PC product line, IBM spokesman Bob Page said Monday.

"The AMD processors are not currently offered in the United States," Page said. "That choice ended in May 2001 when we simplified the product line to make it easier for customers to understand."

IBM Canada continues to sell two models of its NetVista A40i consumer desktop on Big Blue's Web site for that country. However, the company is no longer actively manufacturing these models, according to Page and IBM Canada representatives. The two computers have been discontinued and will no longer be sold once inventory runs out.

IBM continues


Meta Group says consumers should expect PC manufacturers to continue to streamline operations and decrease prices in what has become a strong buyer's market.

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to market Athlon-based PCs in Japan and other Asian countries. Consumers in those markets exhibit less brand preference for processors, Page said.

Intel and AMD are currently locked in a brutal price war. After several years of financial losses, AMD struck a chord with the public with Athlon in the summer of 1999. The chip received rave reviews from benchmark testers and led to increased market share for AMD.

Intel shot back by releasing the Pentium 4 last November and then by starting to slash the price on the chip line in April. On Aug. 26, Intel is expected to release a 2GHz Pentium 4 and further price cuts. The price cuts, in part, have prevented AMD from achieving a lifelong dream of landing a deal to get its chips into a corporate desktop computer from one of the big four U.S. manufacturers.

For its part, AMD is countering Intel by cutting prices and releasing faster chips. In addition, AMD released its first server and workstation chips earlier this year and put out the first Athlon chips for notebooks.

Despite the North American setback with IBM, an AMD spokesman said the two companies will continue to work together in other regions of the world.

AMD also continues to fight for design wins with major companies.

"We're doing better in Europe and other parts of the world," AMD spokesman Ward Tisdale said. "We're always competing vigorously...This is just the way the business is."