The Way Business Is Moving published by
Issue Date: June 2007

AMD gets whacked by Intel in workstation market

28 June 2007
Timothy Prickett Morgan

Last year was a good year for Advanced Micro Devices, which had a considerable market share gain in the workstation market as its Opteron processors provided better bang for the buck than rival Intel's Xeon chips. But now, in the first quarter of 2007, as Intel has gotten its product roadmap together, the market share pendulum has swung back the other way.
According to numbers compiled by Jon Peddie Research, 674 000 workstations shipped in the first quarter of 2007, an increase of 15,2% compared to the first quarter of 2006. Average sales prices of workstations were flat, which helped push up global workstation revenues rose by 15%, to $1,7bn.
This is a significant cooling of the shipment growth rates the industry saw in 2006, which ranged from 25% to 35%, and it could be that some customers are waiting to see the quad-core 'Barcelona'.
Rev F Opteron chips, are expected to be launched next month, before they make their buying decisions. Or, it might be that the appetite for workstations has subsided a bit for reasons that have nothing to do with chip architecture.
The quarter workstation report from JPR shows that no matter what is going on, what is clear is that AMD is losing much of the market share that it gained in late 2005 and throughout 2006. In the third quarter of 2005, JPR estimates that Intel's Xeon chips had a 93,4% share of the two-socket workstation market, compared to 6,6% for AMD's Opteron chips; by the second quarter of 2006, AMD's share had risen to 13,3%, while the Xeon slipped to 86,7%. AMD saw some slippage in the final two quarters of 2006, dropping to around 11% of the workstations sold, but in the first quarter of 2007, AMD lost another three points of share, to 8%.
If you look at the entire workstation market, including single-socket Athlon and Opteron chips as well as Pentium and Xeon chips from AMD and Intel, respectively, AMD's share of the overall workstation market peaked at 3,6% in the second quarter of 2006 and has dropped to 2% in the first quarter of 2007.
"We had expected AMD's share to moderate or level off by the time Intel improved its dual-socket Xeon platform in mid 2006, but we had not anticipated the decline we have seen," said Alex Herrera, the analyst who wrote the latest workstation report from JPR.
"The extent of Intel's rebound will put that much more pressure on AMD to deliver quad-core Barcelona soon - and with better performance than Xeon."
Source: Computergram

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