IDC: AMD gains share against Intel

After a tough year, AMD's market share rose in the fourth quarter, according to an upcoming report. The news follows better-than-expected earnings from the chip upstart
Written by Matthew Broersma, Contributor

PC chip maker AMD gained market share on dominant rival Intel in the fourth quarter of last year, according to preliminary sales figures to be released on Friday by IDC. The increased market share is due to AMD maintaining its technological edge against Intel chips and a successful advertising campaign centered on its new speed rating system.

The results appear to conflict with Intel's own statements that the company gained share in 2001. On Tuesday, when Intel released its earnings, chief executive Craig Barrett said the company had "introduced exciting new products, including the industry's first 2GHz processor, gained market segment share, and earned over $1bn."

Intel and AMD are bitter rivals in the market for desktop PCs, although Intel is far larger. In recent years AMD has gained some ground against Intel because of strong reviews for its Athlon processor line.

Intel recently released an improved version of the Pentium 4 processor, but failed to take the massive performance lead over AMD that some observers had expected.

AMD also makes Duron, a value-oriented, Athlon-based chip that competes with Intel's Celeron. The company hasn't had much luck to date breaking into the higher-end corporate market, however.

"They are continuing to gain market share for the fourth quarter," said IDC research manager Andy Brown. "It has to do with AMD doing more things right, including their ad campaign." With AMD's Athlon XP processor the company launched a new speed-ratings system to give what it calls a more accurate rating than clock speed. The new ratings also make Athlon chips appear on a more even footing with the Pentium 4 in terms of speed.

AMD also appeals to the majority of low-cost PC makers, because their chips usually sell for the majority of low-cost PC makers, because their chips usually sell for significantly less than Intel's. "A lot of the kind of business they get is by default," Brown said.

Low-cost PCs have become an increasingly important part of the market with the economic slowdown of the past two years.

AMD said on Wednesday that its market share was 20 percent at the end of the fourth quarter, compared with 16 to 17 percent at the end of 2000. Analysts had said that it was difficult to call whether AMD had won or lost market share because while its processor shipments had risen, so had Intel's.

AMD's fourth-quarter revenue fell 19 percent year over year. In the fourth quarter of 2000, AMD earned $178m (£124m), or 53 cents per share, on revenue of $1.2bn.

For the year, the company earned $28.9m on revenue of $3.9bn, compared with $793.8m on 2000 sales of $4.6bn.

News.com's Sergio G. Non and Michael Kanellos contributed to this report.

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