Intel has warned that its first-quarter sales will not meet its expectations, thanks not only to demand proving less substantial than the chip giant had anticipated, but - AMD watchers will love this - a "slight market segment share loss".

Intel didn't say which segment of the market it has lost market share in. Instead, it said Q1 FY2006 will yield sales in the range of $8.7bn to $9.1bn, down from the $9.1 to 9.7bn it forecast in January.

Intel said it expects the quarter's operating expenses to be lower than previously forecast thanks to "lower revenue and profit-related spending". However, it said the drop in revenues will pull down the quarter's gross margin percentage.

Intel's Q4 FY2005 results also fell below expectations, the company said in January, the result of "lower than expected desktop processor unit shipments and prices".

AMD was quick to cite figures from market watcher Mercury Research which claimed its processors were to be found in one in five PCs. AMD said Mercury's numbers put its server CPU market share at 16.4 per cent in Q4 2004, up from 12.7 per cent the previous quarter.

Intel said it will provide a further financial prognosis when it reports first-quarter financial results on 19 April. ®