AMD has for a number of years been kicked into the long grass by Intel in producing processors. Whichever way it’s measured, sheer performance, market share, sales figures or reputation, Intel has controlled the desktop and laptop chip processor market. However AMD has been preparing a very significant challenge to fight back. In early 2017 AMD announced the details of its next series of chips and took the market by storm. AMD had found a way to make its chips competitive with the very best Intel chips and even better in some instances, so the two groups finally have parity.
AMD has come to market with an extremely aggressive pricing strategy, in some instances half the price of the equivalent Intel Chip. However now in late 2017 comes the next stage of AMD’s attempt to rise from the ashes, the release of its top of the line processors named Threadripper. Intel was so concerned about this release it immediately released a Core i9 processor, which has so far looked to be poorly conceived, hastily delivered and priced, in comparison with the Threadripper.
In early 2017, there was an announcement that along with the new Ryzen processor range which was coming to challenge Intel at each price point, there was also going to be a whole new super enthusiast range of products that would come in above Intel’s current top of the line processors. Immediately this sparked a reaction from Intel and they scrambled to put together a response to the Threadripper chip.
In previous decades the combination of multiple competitors making processor chips for laptops and PCs has helped to spur on the development of new technology in the market. For a time around 2005, AMD and Intel were largely on par in terms of market share and before that there were multiple processor makers that were in business. However the market has now been reduced down to two significant players and from 2010 onwards Intel has run away with the market in terms of technological ability and this allowed it to sweep up market share.
Intel has made multiple announcements in recent years that it sees the future of computing in the cloud and in sharing network based systems and so has been focusing more of its R&D budget catering for that market segment. Whilst this could be a sensible move on Intel’s part, trying to set itself up for the future of processors, the reality is that currently personal machines are still very much the leading form factor.
In most markets, when a single company has too much market share, it has too much power and this leads to poor service, innovation and value as there is very little incentive for the company to drive any of these things with any real effort because its customers need its service. Intel has had over 70% of the processor market share for ten years and this has led the company to make relatively few big steps in innovation or pricing in that time.
However pricing is significantly different and it is clear that Intel has botched this release, misreading AMD’s intentions and trying to throw out multiple chip options as quickly as possible. What this means is that whilst Intel has produced some compelling and powerful processors in this lineup, initially having one that is more powerful than AMD’s top of the line Threadripper chip, the 1950X, it is also $1,000 more expensive.
Please visit marketline.com to read our full analyst insight