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Sidney 15th March 2005 18:56

AMD could grab 15% market share this year
WE SPENT quite some time at CeBIT last week attempting to pinpoint how well AMD is doing selling Opteron processors compared to Intel. Hacks are a bit hamstrung here because the major research organisations, such as Gartner and IDC, never break out the individual figures.
The chip vendors don't come forward with exact sales figures either - it's an inexact science hedged about by trade secrecy. So how do you get market share figures? We decided to do a straw poll of server partners to see if we could get our head round the figures, and unfortunately for Intel, it's looking good for AMD.

One vendor said to us: "How much market share do you think AMD will have this year in the server area?" We said about 10 per cent. But he said, and this guy knows what he is talking about, we figure it's going to be more like 15 per cent.

The reason he gave was that despite the marketing budget and the sheer volume of sales staff Intel has, customers are still coming to his firm and the questions are about Opterons, and not Xeons. This is an agnostic vendor - his firm doesn't care whether it sells Intel chips or AMD chips.

We talked to another server vendor which sells both AMD and kit - just a few minutes after we'd talked to the first one. His take on market share was that AMD might take 12 per cent server share in 2005 - but he had something else to add to the straw poll. "We don't think that Intel will be able to successfully compete with AMD on servers until 2007," he said. This was a bit of a surprise to us. We'd assumed that by the end of 2006, Intel would have re-engineered its chips well enough that its technology could give AMD a decent run for its architecture.

Not that that will stop Intel being profitable. Its momentum is such that it would take a sheer disaster for the gravy train to come to a halt.

A third vendor drilled down deeper into AMD's profile. Hector Ruiz, he said, is an entirely different person from the former CEO, Jerry Sanders. The biggest difference is that he came from a process environment rather than a sales environment. This makes all the difference to AMD's ability to execute, he reckoned.

For the time being, AMD's sales figures are somewhat obscured by the flash business. We've said in these pages before that we don't think it's a good idea for AMD to sell off its flash business. It would certainly concentrate AMD and the market's mind if it did sell off the NOR flash business, or come to some even more creative deal with Fujitsu, which is still its partner. But maybe it's time to get out of NOR - because the NAND flash folk seem to be creaming the business. And anything that's a drain on AMD's profits is going to be seen by the financial ravens on Wall Street as an overall sign of weakness.

Fifteen per cent market share? We'll know for sure by the end of the year.

Sidney 15th March 2005 18:58

Damn, if is not the flash memory market; AMD would have gone much higher than the peak @ $25 late last year. I would have made enough money to take the whole year off.:D

May be time to buy again when it price drops to $15.:eek:

Buy the stock not the prcoessor. ;)

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