AMD beating Intel at low-end, takes aim at sub-$1,500

AMD is claiming a 54 per cent share of the sub-$1,000 PC market for its K6-2 CPU, and is now taking aim at the sub-$1,500 mainstream desktop market with the 350 MHz version of the chip. This sector of the company's business now at last seems to be booming - on the strength of it AMD yesterday announced that it had gone back into profit in its third quarter. Its sales of $686 million were up 30 per cent on the previous quarter (15 per cent on last year), and although profit was only $1 million, analysts had been expecting another loss. The company says sales and bookings are running at record levels, and that the PC manufacturers' inventory problems of earlier this year have finally been cleared from the channel, meaning there's plenty of headroom for more sales increases. The K6-2 is already topping retail sales charts in the sub $1,000 US market (Intel sales badly dented by AMD upstarts), but is weaker in overall retail sales, in other PC markets and internationally. But the factors that have taken the K6-2 to the top in one sector will apply in the others, as faster implementations come on-stream and as the company progressively erodes corporate determination to stick with Intel. AMD chairman and CEO Jerry Sanders claims the company is gaining share because it has "superior technology," and points to the 3DNow version of the K6-2 as an example of this. But although that will be a factor, AMD's real secret weapons are that the markets are increasingly price-conscious, that the low-cost end of the market is booming, and that Intel doesn't really have a coherent answer to competing chips that are both cheaper and as capable as Intel's products. ® Click for more stories