Intel to claw back market share from AMD in Q2

WITH BOTH AMD AND INTEL brooding silently in their quiet periods before releasing their respective financial reports, the INQ has decided it's a good time add our two cents to financial analysts' speculations about which firm will show better results in Q2.

With the recession still fogging up the horizon, 'winning' remains an elusive concept as the tech industry continues to feel the pinch.

Eszter Morvay, research manager for IDC told the INQ the market research outfit is "predicting an even bigger drop in year-on-year unit sales for desktop unit shipments than the year on year decline in Q1." That decline was 21.6 per cent. "We're forecasting that Q2 2009 will be down 23.1 per cent compared to the same quarter in 2008," Morvay added depressingly.

Having said that, however, the financial situation does appear to be bucking up, with the likes of FBR Capital Markets predicting this could be Intel's quarter, as punters make less of an issue over CPU price differences, giving Chipzilla back some of Daamit's hard won Q1 market share.

It is widely believed that a fair bit of AMD's Q1 revenue increase was down to aggressive pricing, which could potentially put speedbumps on the path of the firm's gross margin recovery.

CPU sales are also looking a bit flat this quarter, but analysts say both AMD and Intel could very well be in for some long awaited revenue growth in Q3 if the economy continues to pick up.

FBR said AMD's Q2 revenues would likely be in line with predictions of $1.12 billion, with Q3 revenues expected to be seasonally higher by about five to ten per cent sequentially to around $1.2 billion. Meanwhile, Intel's Q3 revenue is expected to grow four to eight per cent sequentially to between $7.5 billion to $8.1 billion, just ahead of Wall Street's estimate of $7.7 billion.

Intel's rebranding to Core i3, i5 and CULV, albeit a bit confusing, should help no end with putting sales back on track by the end of 2009. Also promising for Intel are the cheap as chips Pentium offerings for ultrathin notebooks the firm was showing off at Computex a few weeks ago.

The offerings aren't just thin, they're also pretty light and low powered, that is, easy on battery life, and with their low cost, could prove to be a major spoiler for AMD. The anorexic Pentium chips could, indeed, turn out to be something of a cash cow for Intel, much like Atom is for Chipzilla now in the netbook space.

However, many analysts also feel Intel and AMD might start losing ground to ARM in the netbook and nettop space, with more and more vendors considering ARM-based chips over the x86 architecture.

But the reality is that netbooks and their tiny margins are small potatoes to Intel these days, and it's shaping up to look like Chipzilla will really pack a punch with its ultrathin notebook processors.

AMD had better hope it is tough and resilient enough to handle the competition. µ