First - let me (with great humility) gloat a little on yet again being right that Intel would begin to retake share by Q107. I just had no idea how right I was going to be:
http://biz.yahoo.com/rb/070424/intel_amd.html?.v=7
http://money.cnn.com/2007/04/24/technology/bc.intel.amd.reut/index.htm
http://www.linuxworld.com/news/2007/042007-intel-retakes-market-share-from.html
With iSuppli claiming 4.5% and Mercury saying 6%...these are very big gains - far more than Intel could have expected to win back. So in spite of ASPs holding and big share gain they couldn't beat their topline number. That's concerning and could indicate a slight slow down in the PC market. If that's the case, with so much built out capacity, winning share is going to be a huge focus for Intel & AMD. Expect AMD to drop prices further and perhaps start bundling their new ATI products with old AMD CPUs to help things along. However, AMD can't go much further down on pricing without probably starting to giving parts away at a loss. As mentioned below, they will possibly retake some share in the channel but at the cost of ASPs.
What may negate this is the rather substantial price drop Intel just effected:
Intel Price List
It appears this will be an interesting quarter. Intel has strategically dropped prices in certain desktop and server parts while maintaining mobile prices. It's obvious in desktop they are using this opportunity to gain as much market share with Conroe before Barcelona appears in any substantial volume. They will be hoping the window between Barcelona availability in any reasonable volume and the launch of Penryn in reasonable volume is very small. If this happens and the performance gap is not too high, they will be in a phenomenal position to defend AMD attempts to retake share with Barcelona. If Barcelona performs much better than Penryn, Intel will drop prices so that the price/performance equation is in their favour and will hasten their own quad core ramp (already visible in the new price drop). Keep in mind that their process lead coupled with the advantage of an approach of sticking two dual cores together which means not having to throw a part away if one die is defective gives them substantial cost advantage.
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5 comments:
The market share #'s are stunning - it took AMD over a year to gain what they just lost in less than one quarter. I'd like to see the 40% market share runrate calculation now! (Funny how Shari-kook hasn't revisited that prediction much!) Though if you run the #'s you could almost see a NEGATIVE 40% runrate?!? OK, not quite but if Sharikou can just make up #'s, why can't we?
This can't only be about Intel's products, AMD must have seriously screwed up their product mix/planning (and in doing so, hosed the channel). So instead of larger margin channel sales, they now have lower margin OEM sales to folks like Dell AND get the added bonus of building inventory.
Perhaps an article revisiting the benefits/impact of "cracking" Dell might be an interesting topic to write about?
We have yet to see an acceptance of error from they other bloggers with names that starts with "S".
We'll one seriously thought AMD will be at 30% market share end of 2007. The other one, well the other one was delusional.
Never underestimate the ability of AMD to screw things up.
You are a genius. "S" not so much.
Anonymous - I've dealt with the Dell issue extensively before in posts and in comments. Here's a link...there's more if you surf the posts around last November or so:
http://sharikou180.blogspot.com/2006/10/dell-sucking-amds-capacity-dry.html
I assume S refers to me. This drop in revenue for Q1 is big. If AMD has another drop of this size in Q2 it will match the massive decline in revenue in 2002. Obviously, this is not what I was expecting.
I'm still waiting to see the volume information so I can tell just how bad the Q1 drop is. If AMD lost a lot of volume share in addition to revenue this would be even worse.
Roborat, if you are going to attribute things to me then maybe you could at least attribute correct things to me. 30% by the end of 2008, not 2007. And, I think this is still a possibility. The market tends to be elastic for up to two quarters, it will take until Q3 to see whether the Q1 declines are a trend or a temporary dip.
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