The Intel Advantage?

Posted by: Peter Burrows on November 8, 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.