AMD in 2005: Coming Out of Intel's Shadow?
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Opteron Contd...
AMD had designed the new microprocessor to allow customers to migrate to 64-bit computing without any significant sacrifice of the existing code base. The technology aimed at providing full speed support for x86 code base, offering high performance levels for existing 32-bit applications. It provided a large memory, which was useful for computationally intensive applications, such as databases, ERP, decision support, scientific and technical modeling, etc. It also helped lower TCO and network management complexity through a unified architecture for desktop, notebook, workstation and server, and platform flexibility. |
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Opteron's target segments included companies that required faster database
transactions, customers needing quick graphics response such as in the CAD
industry, which had computationally intensive tasks for modeling and scientific
applications.
Though Opteron was designed for high-end servers it could also run like 32-bit
(Pentium and Athlon) processors in most PCs. A PC version of Opteron was also
expected to be available unlike Intel's Itanium 2. Opteron prices ranged from
$283 to $794, compared to Itanium 2's $1,338 to $4,226. Opteron's design made it
fully backward compatible with existing 32-bit applications. That differentiated
it from Itanium 2, which used a different architecture.
By offering both 64-bit and 32-bit operation with the same chip, AMD believed
that Opteron systems would be the perfect upgrades for aging servers that used
Intel's Pentium and Xeon processors. AMD also had plans to introduce a 64-bit
processor for home computers in 2003. The Athlon 64, due for release in
September 2003, would be the first such chip aimed at the consumer market. In
early 2003, there were no 64-bit applications for consumers, but AMD believed
that once Athlon 64 machines were available, multimedia and game software
companies would write programs to take advantage of their power.
David vs Goliath
For more than 30 years, AMD had been challenging Intel in the semiconductor
industry. Intel had been able to control x86 microprocessor and PC system
standards and dictate the type of products the market required of competitors.
Intel's financial muscle allowed it to market its products aggressively, offer
special incentives and to wean away customers who did business with AMD. Intel
had longstanding partnerships with both software developers and hardware
manufacturers. Intel exerted substantial influence over PC manufacturers and
their distribution channels through the "Intel Inside" brand and other marketing
programs .
Intel spent substantially greater amounts on R&D than AMD did. For instance,
Intel was expected to generate revenues of $34 billion in 2004 with projected
profits of $7.35 billion. This meant Intel earned in 11 days what AMD made in a
year. In January 2005, Intel had a $14 billion cash reserve compared to AMD's
reserves of about $1.1 billion.
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