AMD beats Intel in January sales
Published: 26 Feb 1999 15:54 GMT
PC Data's study shows that systems based on AMD's K6 processor family accounted for 43.9 percent of unit sales in January, with Intel-based systems accounting for 40.3 percent of sales.
The move was driven primarily by AMD's success in the low-end market. Within the past year, all of the major PC manufacturers have begun to use AMD's processors in their cheaper, low-end systems. And that is the only segment of the retail market to see a rise in unit sales for the month, said PC Data analyst Stephen Baker. "Some people are switching down [to lower-priced systems] and new people are starting at the lower end," he said. "It also reflects that pricing is generally shifting down. Even if you wanted to buy a $2,500 (£1,525) PC you really can't. There's nothing out there that has any value at that price point."
The January data shows AMD's strength in the low-end market. In systems costing under $1,000, AMD-based systems accounted for more than 50 percent of sales, with Intel's share down to only 25.4 percent. In systems costing under $800, Intel-based systems accounted for only 14.6 percent of unit sales, behind both AMD and National Semiconductor Corp.'s Cyrix division.
By contrast, Intel-based systems dominated the dominated the above-$1,000 PC market, accounting for more than two-thirds of units sold. But while AMD may be winning unit sales, margins are slim at those price points. And Intel has been battling back, slashing prices on its processors.
A production problem in the fourth quarter hurt AMD's income levels, causing it to miss analysts' expectations. The production problem has also left the company with a lot of low-end chips in inventory. But AMD's strength in this market could pave the way for the company to move ahead, Baker said. "AMD has tried to build their credibility in the marketplace. People see AMD is selling and they see all the ads," Baker said. "It's kind of like they're evangelising and getting people comfortable with them until they're ready to run at more profitable categories."
In a separate announcement today, Gateway Inc. said it was launching a line of systems featuring the new AMD K6-2 processor. The Gateway Select line includes the $899 Select 366, which uses the 366 MHz K6-2 processor, and features 32 MB of SDRAM, a 4.3 GB hard drive, a 12x/32x CD-ROM drive, two-piece speaker system , and a 15-inch monitor.
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