Intel Unleashes Atom Bomb on the Competition in 2008

Intel gained share in the global microprocessor during every quarter of 2008, partly due to the success of its Atom chip in the emerging netbook sector, according to iSuppli Corp.

Intel in the fourth quarter accounted for 81.8 percent of global microprocessor revenue, up 0.88 percent from its 80.96 percent share in the third quarter of 2008, according to iSuppli's final market-share figures. The company's microprocessor business in the fourth quarter also grew on a year-to-year basis, with its share of global revenue rising by 3.4 percentage points from 78.4 percent in the fourth quarter of 2007.

"Intel grew its share of microprocessor in every quarter of 2008 on a sequential basis, effectively using each quarter as a building block for the next," said Matthew Wilkins, principal analyst, compute platforms research, for iSuppli. "During this the time, Intel's low-priced Atom has become increasingly popular as the netbook market has gained steam."

Worldwide unit shipments of netbooks soared by in excess of 2000 percent in 2008 and are expected to rise by 68.5 percent in 2009.

Intel's broad-based success

"Intel's Atom offering for the netbook segment has helped, although the major contribution to the company's share gains has undoubtedly come from the continued strength of the company's microprocessor brands and products in the desktop, notebook and server segments," Wilkins said.

Intel's main microprocessor rival, Advanced Micro Devices (AMD), lost share on both a year-over-year and sequential basis in the fourth quarter of 2008. AMD accounted for 10.6 percent of worldwide microprocessor revenue, a decrease of 3.5 percent from the 14.1 percent it held in the fourth quarter of 2007. The company's gain in share in the third quarter disappeared in the fourth quarter, as the company lost 1.6 points of share in the fourth quarter, down from the 12.2 percent it held in the prior quarter.

For the full-year of 2008, Intel grew its market share by 1.6 percentage points, while both AMD and the companies making up the others category lost share. Specifically AMD lost 1.2 percentage points of market share in 2008 compared to 2007 and half a point was lost collectively by the other companies participating in the microprocessor market during the same period.

"While 2008 has been a challenging year for AMD, the company has undergone a number of strategic initiatives, such as its moves to reduce its production assets," Wilkins said. "And with its 45nm products now shipping, AMD is better positioned in 2009 than it was in 2008."

Last year was the third consecutive year that the collective market shares of Intel and AMD have increased. Their combined share rose to 92.5 percent in 2008, up from 90.9 percent in 2006.

"Clearly things are getting tougher if you're a microprocessor supplier and your name is not Intel or AMD," Wilkins added.

Posted to the site on 1st April 2009