For the first time, last December, the best selling PC processor in the US retail market was not made by Intel, but by Advanced Micro Devices (AMD) in the shape of its K6-2.
According to market research firm PC Data, AMD grabbed 43.9 per cent of unit sales at the end of last year, ahead of Intel's 40.3 per cent, and Cyrix's 15.8 per cent in third place.
AMD chips were particularly popular in systems costing less than $1,000, and in December, the firm's CPUs dominated more than 50 per cent of this fast growing segment.
Sub $1,000 PCs accounted for an unprecedented 65.6 per cent of all unit sales for the period, with the average price of a retail PC falling to a new low of $953.
But the figures also indicate AMD's greatest vulnerability because it has only beaten Intel in the lowest margin sectors. Intel still holds more than two thirds of the far more profitable market for PC's costing more than $1,000, and as it moves to regain ground at the low end, the chip giant has been cutting the price of its entry level Celeron processor aggressively.
This has put further pressure on AMD's margins and earlier this month the clone maker warned investors that it might post a loss for its current quarter.
AMD hopes that its new K6-III processor will enable it to move up the PC food chain and on Friday, announced that both Gateway and Compaq would use the newly announced 400MHz version in their consumer machines.
At the same time, it also launched a 450MHz version of its K6-2 processor, which IBM plans to deploy in its new Aptiva 520 consumer desktop.
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