The Intel Advantage?

Posted by: Peter Burrows on November 08, 2005

There’s remarkable news from the front in the ongoing microprocessor wars. In October, more PCs sold in US retail outlets were equipped with microprocessors from AMD, rather than from Intel, according to market researcher Current Analysis.

Such a press release would have been unthinkable not too long ago. Indeed, for darn near twenty years, PC makers knew that Intel was the chip-maker that buttered their bread. While the Santa Clara giant wasn’t always a picnic to deal with, it could beat any of its rivals prices, and was the only one that could reliably crank out the necessary volumes of super-fast, feature-rich chips needed to satisfy the gigantic PC market. Complain though they might, the PC makers that did the best job of buddying up to Intel tended to do the best in the marketplace.

But now look? AMD’s rise seems to have a corollary: the temporary lull in Dell Inc’s long market share grab. Dell is the only PC maker that still sells only Intel Inside.

And Intel is also causing problems for another long-time strategic partner: Hewlett-Packard. It’s been more than a decade since the companies decided to partner, combining some core HP technology with Intel’s manufacturing prowess to create a new family of chips, now dubbed Itanium. It’s been years since HP decided to wind down production of its own high-end PA-RISC processors, so it could committ itself fully to this new family of high-performance, low-cost chips. And yet, the current family of Itanium chips is selling poorly, and Intel just announced a delayed schedule for upcoming upgrades. HP execs are putting on a good face. “Delays happen,” HP executive vice president Ann Livermore told me recently. But given the long and winding road Itanium has already travelled, such glitches are sure to make would-be customers wonder if they should keep waiting patiently.

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Reader Comments

Kris

November 9, 2005 02:56 AM

Dear Peter,
Its wonderful to hear about that research output. If thats true, then the whole discipline of the so called 'Ingredient Marketing' in the High Tech industry is on a call. 'Intel Inside' comes from a master who have sheer competence in this computing industry, and that led and shown the growth of the PC industry. We shall have a debate online. Lets see how many people believe that this is an indication of another trend where, Intel's market space shrinks and AMD or any other players who can make a command over. Expect to have a nourishing discussion online

Wes

November 11, 2005 12:06 AM

Gamers and people wanting high performance desktops all know the AMD-FX & X2 chips are the fastest by a large margin. AMD has long proven that clockspeed is not king, and Intel finally accepted that point.

The only lead Intel has at this time is the mobile Centrino (Pentium M) line of chips. Next year AMD is making a huge push in laptops so I expect results to be different a year from now.

With Dell's continuing exclusive reliance on Intel chips they are further jeopardizing consumers and businesses who are increasingly demaning AMD chips.

A few years ago Gateway was king. They had highly customized systems and lost it when they went to proprietary everything, which is exactly what Dell is doing today. Dell knows that selling the cheapest price isn't a winning game - building solid systems with great support is the winning combination. Offering customer a choice of processors would be a great start to a lead in technological dominance instead of commodity products.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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