AMD grabs 25% share of market

Sledgehammer70Sledgehammer70 California Icrontian
edited January 2007 in Science & Tech
Mercury research said AMD took 25.3% of the X86 market in the fourth quarter of last year. Not only did they take market share from Intel, they also robbed VIA of a small portion of their market share.

In plain numbers, AMD finished the fourth quarter of 2006 with a market share of 25.3%, whereas Intel dropped about 3.4% from 77.0% to 74.4%. According to Mercury Research, Intel lost 2.6 percentage points, while AMD gained 3.4 points. Dean McCarron, principal analyst of Mercury Research, told TG Daily that the difference of 0.8 points was lost by Via. Compared to Q4 of 2005, in which AMD and Intel held 98.4% market share in the x86 market, that number in 2006 climbed to 99.7%. One contributor to the overall shift was Apple, which transitioned from PowerPC to x86 Intel processors over the course of last year. For Q4 2006, that means that Intel had a new customer that pushed more than 1.6 million x86 processors into the market.

Comments

  • miragemirage
    edited January 2007
    Sledgehammer70 wrote:
    Mercury research said AMD took 25.3% of the X86 market in the fourth quarter of last year. But not only did they take market share from Intel, but they have also robbed VIA of a small portion of their market share.

    In plain numbers, AMD finished the fourth quarter of 2006 with a market share of 25.3%, and Intel dropped about 3.4% points from 77.0% to 74.4%. According to Mercury Research, Intel lost 2.6 percentage points, while AMD gained 3.4 points. Dean McCarron, principal analyst of Mercury Research, told TG Daily that the difference of 0.8 points was lost by Via. Compared to Q4 of 2005, in which AMD and Intel held 98.4% market share in the x86 market, the number of 2006 climbed to 99.7%. One contributor to that overall shift was Apple, which transitioned from PowerPC to x86 Intel processors over the course of last year. For Q4 2006, that means that Intel had a new customer that pushed more than 1.6 million x86 processors into the market.

    Well, I don't buy this. And, no one believed in the stock market as well. AMD stock price is 0.3% lower today. Actually it is down more than 10% since the beginning of the year, INTC is not. This is not the picture of a company gaining market share. What do you think, Sledge?
  • LeonardoLeonardo Wake up and smell the glaciers Eagle River, Alaska Icrontian
    edited January 2007
    Mirage, that's a simplistic view. The question is howAMD gained market share. Selling more units of anything for any business does not necessarily equate to more profitability or higher margins. Given the price wars between "Chipzilla" and "Chimpzilla" and AMD's aggressive push into the low-cost (low margin) market segment, it is not stretch to assume that AMD's fiscal health has not improved. The competition with Intel and the resulting price lowering for must chips has hurt AMD. That probably was what was reflected by the share price change.
  • miragemirage
    edited January 2007
    Leonardo wrote:
    Mirage, that's a simplistic view. The question is howAMD gained market share. Selling more units of anything for any business does not necessarily equate to more profitability or higher margins. Given the price wars between "Chipzilla" and "Chimpzilla" and AMD's aggressive push into the low-cost (low margin) market segment, it is not stretch to assume that AMD's fiscal health has not improved. The competition with Intel and the resulting price lowering for must chips has hurt AMD. That probably was what was reflected by the share price change.

    Okay, your point makes sense. AMD could be increasing its market share at the low-end segment (shall we say Dell computers) while not increasing the profit. But I think they are not able to continue increasing their market share at the high-end and server segments where Intel simply has better products today.
  • LeonardoLeonardo Wake up and smell the glaciers Eagle River, Alaska Icrontian
    edited January 2007
    I think AMD's strategy right now, knowing they are at a technological disadvantage, is to retain, at any cost, the market share they fought so hard for. Once the regain technological parity with Intel, then prices can rise again to improve profitability.
  • Sledgehammer70Sledgehammer70 California Icrontian
    edited January 2007
    mirage wrote:
    Well, I don't buy this. And, no one believed in the stock market as well. AMD stock price is 0.3% lower today. Actually it is down more than 10% since the beginning of the year, INTC is not. This is not the picture of a company gaining market share. What do you think, Sledge?

    First thing I don't view stocks as a factor of a company doing well or badly. of course AMD is down they had to post a loss of $550 Million because of the purchase of ATI. In my eyes it was an expected hit to AMD. Also to say a stock is a determining factor to if a company gained share or not is the wrong place to be looking. it is all about volume...

    I can take my company for example. I know for a fact we suck right now across the board but yet our stock is climbing... why? because some guy on wall street thinks we will do good in the rest of the year, and seeing the basic number for myself, Wall street ANALists are morons...

    AMD did increase their Server market share in the 4th quarter as well. AMD holds an impressive 64.5% share in the multi-processor x86 server space, and with Barcelona being a drop in for those current servers, I don't see Intel grabbing much of the share AMD took back anytime soon, unless Barcelona is a slow chip, which is not the word buzzing around the backend :)
  • LeonardoLeonardo Wake up and smell the glaciers Eagle River, Alaska Icrontian
    edited January 2007
    Well said, Sledge. You are right, in that analysts often really misunderstand technology advances. And yes, correct, analyst comments and resulting stock market actions are not gauges of a company's market share. What just happened with the slight downturn of AMD stock prices is indicative that the analysts and stock traders didn't care about AMD's market share increase but were concerned, rightly or wrongly, about AMD's margins.

    Let's say Ford Motor Company, which lost $12.7 billion last year were to start selling their behemoth SUVs and pickups for $4000 each. They would sell out their entire inventory, surge to full production capacity, and take market share from all the other manufacturers. Their sales volumes (units) would rise dramatically. They would still incur an enormous loss, which would probably reflect in their stock price.
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