The new kingmakers

Continuous process refinements could also lead to an "FX-65" or a similar processor, which takes over the high end of the FX product line, allowing AMD to scale back FX-62 prices. Furthermore, such an FX introduction could be entirely separate from AMD's double-dual-core platform, code-named "4x4," whose announcement may be forthcoming in the next few months.

But until that time, how many months can AMD afford not to have a direct competitor to Core 2 Duo, in a product category that most will concede AMD effectively created? "They founded that segment," said IDC's Shane Rau, speaking about AMD and the high-end, enthusiasts' segment of the market. "When they came out with the FX products, they founded a segment that Intel then had to react to with the Pentium 4 Extreme Edition. That validated what AMD had done. AMD did this by leveraging things that, at the time, Intel was kind of pooh-poohing, [including]64-bit technology. Intel was taking its time towards going 64-bit; AMD grabbed it, rode it, and said, 'Here's a place to differentiate, and here's a segment that we can create, where we can really benefit from 64-bit technology.' So I think they would probably want to defend this niche ... aggressively. It's a kingmaker, it's a trophy kind of segment."

But most importantly, the technology that enters the enthusiast end of the market "waterfalls" down, to use Rau's term for it, into more mainstream segments over a few product cycles. How distinct a manufacturer fashions its high-end product will inevitably determine how well that same product will distinguish itself in twelve to eighteen months' time.

"I think the enthusiast segment is arguably what has enabled AMD to rise in market share," professed Rau, "and become a more viable and innovative competitor. Their roots are in value processors, and competing on price. If they just compete on price, then Intel - which has more market share - can largely control pricing, and bring the boom down on AMD. That's what they've done in the past, like in 2001. So AMD needs to differentiate. One way you differentiate is on performance."

Can AMD's usual differentiation strategy work yet again, this time against its most formidable competitor to date? Rau believes it can, due mainly to how well AMD has already positioned itself not just in the enthusiast market, but in multiple markets. In servers, according to IDC figures, AMD's Opteron line has now captured 22.9% market share against Intel's Xeon. That fact alone has enabled it to remain strongly competitive against Intel, in a market the latter company still officially dominates. And just today, HP announced it would in certain of its workstation products, when it had every opportunity to switch to Core 2 Duo.

Just by entering a market, Rau believes, a reputable player automatically gains 10% share. If it plays its cards right - as AMD apparently has - it can garner 20% or more. So multiple markets have a cumulative, beneficial effect for a company. "If you keep stacking up markets that you're in," Rau said, "you're hedging your bets. You're increasing your exposure to multiple markets that you can draw nourishment from. You're begging your competitor to beat you at all places, and likely they can't. So by hedging its bets, AMD, I think, is guaranteeing itself a level of security."

"[AMD] provides a value proposition. It's got good performance, it's got reasonable price, it's got longevity that is a promise that the product will be available over a long period of time. So I think AMD can defend itself," pronounced IDC's Rau.

We're entering a critical sales period for the year: the back-to-school period which OEMs perceive as second only to the holiday season. "This is when design win decisions are being made," said Rau, when OEMs decide which manufacturers to go with, and how much to invest in them. When a corporation like Intel has a new and triumphant architecture like Core 2 Duo, it's going to rack up some design wins. So as a competitor, you need to prove to your customers that you're still in the game, and you need to do that today. Cashing in your chips with multiple markets is one way - essentially leveraging the gains from one market to stay alive in the others, as AMD did today with HP. Another way is to maintain stature, and one certain way to accomplish that ... is .

"If you go back to the ATI deal, the timing of the deal may reflect this," said Rau. "Customers will now be assured that AMD is in it for the long haul in all of these segments, and will be a viable competitor, and therefore is worth investing in, in the long term."

All of this bodes well for AMD's upcoming 4x4 announcement, our analysts believe. It's probably nowhere near the performance-per-watt leader; AMD's already conceded that battle, at least for now, said In-Stat's Jim McGregor. "At 125 W of processor power, it's basically going to melt down half of New York."

But will the enthusiast market care? Probably not. "If you're going to buy a system from, like, Alienware, it's not going to be fan-cooled anyway," McGregor stated. "It's going to have some kind of creative cooling techniques: cooling pipes or liquid cooling, or something else. So really, it comes down to what is the raw performance of it? And I wouldn't say that AMD's [blown out of the water]; AMD's still got room to compete. We're not going to be at a point here where one's definitely going to dominate the other like AMD has over the past two years over Intel, but I wouldn't say that Intel's going to blow AMD out of the water, either ... at least not yet."

Complete Core 2 Duo launch coverage:
Intel is back: Core 2 Duo launches
Core 2 Duo Logo Intel aims to ship 1 million Core 2 Duo processor within seven weeks
TG Daily interviews Intel: "Core is changing the game"
Official: Intel releases Core 2 Duo, Core 2 Extreme
Up to $16,000: Core 2 Duo computers flood the Net
The long road to Conroe
Tom's Hardware: Core 2 Duo smokes AMD's Athlon 64 X2
Intel to launch Merom, Conroe on Thursday
Four AMD dual-core prices now at or near Intel price/performance curve
Technology Background: Will Intel's Core Architecture Close the Technology Gap? (Tom's Hardware)

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