The Success of AMD's New Nomenclature

By Mario Rodrigues

Date: December 29th, 2001

With the launch of Athlon XP, AMD introduced the model number naming scheme which relegated clock speed to secondary importance. Looking at data from Price Watch, with this change AMD's top two Athlon XP processors are now considerably more expensive than Intel's parts when clock speed is used as the standard of comparison.

For example, the lowest price for an Athlon MP 1900+, which runs at 1.6GHz, is currently $337, an XP 1900+ is $236 while a 1.6 GHz Intel Pentium 4 is only $161.  Yes, the AMD Athlon MP or XP 1900+ outperforms even Intel's fastest (and still rare) 2GHz P4, the point is that, at the same clock speed, AMD has taken over pricing dominance with a chip that is inherently much cheaper to produce.  Also, AMD's latest Athlon, the MP 1900+, is now selling on Price Watch even beyond AMD's 1k lot price which has never been the norm.

What does this not-so-little coup d'état tell us?  In terms of AMD's new nomenclature, the strategy has proven to be an unreserved success in educating buyers of the more realistic relative value of AMD's CPU's compared with the higher clocked, but slower performing Pentium 4s. 

In relation to Athlon MP, the profit margin looks mighty healthy. 

Many have said that AMD were too reserved with their naming scheme and could have increased the model number rating by 100 with little complaint.   I believe AMD held back for three reasons.  First, to create more impact at product launch, second, to generate ongoing product demand, and third, to remain competitive with Intel's Northwood when launched.

There's no doubt that Athlon XP made a huge impact when it debuted and its success continues unabated.  The XP launch has generated tremendous demand; demand which has resulted in AMD running out of two speed grades.  These achievements could produce yet another record breaking quarter as AMD works to exceed 8 million processors sold.  If this was all part of AMD's intended master plan, they turned the tables on Intel and beat them at their own marketing game [ed: the XP's unrivaled performance levels also help].

Everything looks rosy for AMD.  Will this change when Northwood is launched?  I think not.  Sure, the extra 256KB of level 2 cache will help but it won't be enough to get Intel's bacon out of the fire.  AMD already has two speed grades that outperform Intel's finest.  Q1 should see the launch of XP's at 2000+ and 2200+ levels, which should leave Intel's latest and greatest eating dust [ed: and it remains to be seen if Intel can overcome severe production problems and ramp up the 0.13 micron lines upon which the Pentium 4 Northwood depends].  With an expected launch price of $562 for the 2.2GHz Northwood, I can't see too many people of intellect queuing up to buy.  Who is really that daft to stump up that sort of money?  I hope it's not you.

As always the proof of the pudding is in the eating.  The New Year will answer all our questions.


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