Sunday, December 04, 2005

INTEL delayed Opteron for two years

AMD was the world's first CPU maker to break the 1GHZ line, the Athlon CPU introduced in 1999 had a lead over INTEL and at one point had over 20% of the market. At the same time, AMD started developing the Opteron, which was code named Hammer.

We all know what happened next: INTEL signed exclusive deals with big Athlon PC makers such as Sony, NEC, Gateway, and put strict AMD quotas on others such as Compaq. Overnight, AMD market share dropped to 15% or less and was largely pushed into the whitebox market, its revenue plunged. AMD had to borrow money to survive, it almost bankrupted. AMD had to cut R&D. The Opteron was delayed again and again, due to lack of resources. Eventually, AMD launched Opteron in April 2003.

Some people expected Opteron to gain substantial market share due to its 2x performance lead over Xeon, but it did not happen. Until June 2005, Opteron had only 5% server market share, and did not show any sign of fast growth.

Everything changed after June 2005. In one quarter, Opteron revenue jumped 89%.

What happened? AMD filed the anti-trust lawsuit against INTEL. Immediately, we see almost 180% degree turn from many major vendors, from OEMs to retailers and distributors. They all started to use AMD for one reason or another.

For instance, sometime after the lawsuit, I went to curcuitcity.com and searched "turion", every time, the site sent back a programmed HTTP error, searching any random string, I got a well formatted web page. I emailed circuitcity.com, and surprisingly, they acknowledged it and fixed it the next day and the search found the Turion notebooks.

As another example, before the lawsuit, Supermicro designed a whole slew of Opteron motherboards, they were initially sold under Supermicro brand on some online stores, such as monarchcomputer. INQ reported the availability of such boards. Immediately, these boards were taken off the web site. When weeks later these boards reappeared, they were all marked as "Monarch" motherboards, which did not inspire confidence, because we know Monarch is not a MB maker. Today, 5 months after the lawsuit, you can go to monarchcomputer.com, and you can see the Supermicro Opteron boards under the SuperMicro brand.

Similar phenomena were observed in retail stores. AMD alleged in their lawsuit that INTEL sets quota of shelf space for AMD in retail stores such as bestbuy and circuitcity. Before the lawsuit, when you go to BestBuy or CircuitCity, you saw far more INTEL PCes than AMD PCes. After the lawsuit, you see almost equal number of desktop PCes from both AMD and INTEL. The result: AMD now has 67.7% of the US retail desktop sales and 31.5% of the notebook sales. AMD surpassed INTEL in total PCes (desktop+notebook) sold in US stores.

These facts tell us this: people don't care for the INTEL brand, people are not stupid, when they see 64, they know it is 2 times of 32. Once AMD64 is given a fair chance, it flourishes on technical merits. People have spoken with their wallet.

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