Study: Intel's Q2 market share up, AMD's down

Intel Corp.'s share of PC processor shipments increased by two percentage points in the second quarter over rival Advanced Micro Devices Inc. (AMD), which lost ground in the quarter, according to a report out this week from Mercury Research Inc.

Intel shipped 82.8 percent of the chips in the second quarter, up from 80.8 in the first quarter of 2002. AMD's share stood at 15.6 percent, down 2.6 points from its first-quarter share.

"The second quarter was not a good quarter for anyone," said Dean McCarron, principal analyst at Mercury. Units shipped fell 10 percent in the second quarter, and Intel's shipments simply declined less than AMD's, he said.

The study, conducted each quarter by Mercury Research, tracks shipments of processors for desktops, notebooks, and Microsoft Corp.'s Xbox gaming console.

Via Technologies Inc. and Transmeta Corp. saw increases in their market share in terms of units shipped, but the two companies combined for less than 12 percent of the market's shipments during the second quarter, McCarron said.

Intel has steadily increased its share over the past 5 or 6 quarters, McCarron said, thanks to regular product announcements that get initial market attention. Intel has released several faster versions of its Pentium 4 and Celeron processors for PCs this year.

AMD has also updated its flagship Athlon processor, but lost significant ground in the second quarter as PC makers moved to sell lower-cost PCs, and McCarron sees more tough times ahead for AMD in the second half of the year. Intel has done a good job of cutting prices on its lower-cost chips, such as its Celerons, he said.

PC makers have been introducing low-cost PCs designed for less-experienced buyers, who tend to be more familiar with the Intel brand than with AMD, observers have said in the past. AMD's chips are usually priced far below Intel's, but the prices of the Celeron and AMD's Duron currently are similar, according to information on the companies' Web sites.

However, faster chips based on the company's Hammer technology are scheduled for release at the end of the year, which could boost AMD's spirits headed into 2003. "We're not sure where Hammer will be positioned against Intel, but it could be a whole new ball game for AMD" next year, McCarron said.

Transmeta saw improvement in the second quarter beyond what it could have expected, but its outlook will depend on its ability to get its costs under control, McCarron said. Transmeta reported a US$35 million loss in the second quarter, and will lay off 40 percent of its workforce in an attempt to bring its costs down.

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