Intel and AMD: competitive market analysis in processor manufacturing

¶ … Intel and AMD

Computers have become an integral part of life for nearly every individual. In today's society, computers are used for everything from creating documents, spreadsheets, and web pages to booking flights and hotels, and from downloading music and burning CDs to creating PowerPoint presentations. What this means is that numerous companies have entered the marketplace, competing with one another and developing new innovations. This paper compares Intel and AMD, two companies that provide the same service to customers and compete with one another.

INTEL

Intel is the world's leading maker of computer processors, holding an 80.6% share of the PC market. If Intel processor sales for Microsoft's X-Box are included in the tally, Intel's market share was 81.2%. The increased Intel market share apparently came from a strong push in low-price Celeron processors, which ended up making Intel overall processor ASPs for the quarter flat. Intel's revenues since June 30, 2001-March 30, 2002 have been as follows: (1) $6,334,000,000 (period ending June 30, 2001); (2) $6,545,000,000 (period ending September 29, 2001); (3) $6,983,000,000 (period ending December 29, 2001); and (4) $6,781,000,000 (period ending March 30, 2002).

Intel's trademark and groundbreaking invention was the Pentium chip; the chip which is known by the now ubiquitous "Intel Inside" sticker on nearly all personal computers. In addition to the Pentiums I, II, III, IV, and MMX, Intel manufactures the Celeron and Celeron Tualatin chips, lower cost versions of the Pentium IV chip.

IV. CONCLUSION

One of the most beneficial components of the free market is the ability of new companies to enter and successfully compete in the market. Intel and AMD, two of the major manufacturers of computer processors, exemplify the meaning and spirit of the advantages and disadvantages of free market competition. One of the advantages of the persistent competition between Intel and AMD is that the price of CPUs has vastly fallen within the past 10-14 years. Likewise, the pace at with which new computer processors are developed and rolled out has greatly risen. However, an arguable disadvantage of the competition between Intel and AMD is that the market for computer processors has become somewhat narrow, i.e., Intel and AMD are the only two "serious" companies competing in this arena.