News
AMD, Sub-$600 PCs Record Big Gains In February
(03/25/99, 2:38 p.m. ET)
By Aaron Ricadela , Computer Retail Week
PCs priced less than $600 recorded massive gains in February, compared with one year ago, lifting the fortunes of CPU maker Advanced Micro Devices, according to market researcher PC Data.
AMD processors powered 51.4 percent of all desktop PCs sold at retail in February, thefirst time AMD's share has exceeded 50 percent, PC Data reported. Intel's unit share was 38.3 percent.
Meanwhile, retail revenue from Windows PCs sank 16 percent, compared with a year ago, according PC Data, in Reston, Va. The average selling price of a Windows PC fell 17 percent, compared with the year-ago period, to $947, while retail unit sales increased less than 1 percent, PC Data said.
Sub-$1,000 PCs accounted for 62 percent of unit sales in February, an increase of 22 percent, compared with the year-earlier period. Retail point-of-sale data from February showed the strongest gains at the lowest price points.
Unit sales of PCs priced less than $600 grew 657 percent, compared with February 1998, and accounted for 19.9 percent of all PCs sold at retail.
Unit sales in the $600-to-$1,000 price range fell 12.9 percent as the lowest sector took away sales, PC Data said. PCs priced between $600 and $1,000 constituted the largest slice of the retail market, representing 42 percent of unit sales.
Unit sales of PCs priced between $1,000 and $1,500 increased 4.6 percent over February 1998 and represented 33.3 percent of sales. PCs priced above $1,500 represented 5 percent of unit sales and posted a 70 percent unit decline.
Stephen Baker, senior hardware analyst at PC Data, said AMD and eMachines exploited the sector's changing landscape by focusing on the low end of the market, powering gains in the sub-$600 segment.
In the sub-$1,000 segment, AMD-based systems accounted for 65.7 percent of sales, while the company claimed a 73 percent share of PCs in the $600-to-$1,000 range, and a 47 percent share of the sub-$600 market.
Intel chips were found in 18.5 percent of sub-$1,000 PCs, but it led the $1,000-to-$1,500 market with a 65.7 percent share, and nearly cornered the market on higher-priced PCs, PC Data said.
Robert Fuller, AMD's director of field marketing for the Americas, said the company's "balancing act" at retail is weighing market share against reaping the highest average selling price (ASP) for systems using its chips.
"We have a responsibility to our shareholders to getting the highest possible ASP we can," Fuller said. AMD's new K6-III processor and forthcoming K7 chip aim for more robust and expensive PCs.
According to PC Data, PCs powered by an AMD processor sold for an average of $851 in February; Intel Celeron PCs sold for $917; Intel Pentium II PCs for $1,346; and Cyrix-based PCs carried an average selling price of $583.
Cyrix's market share in February was 10.3 percent, PC Data said.
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