Henri Richard explains why AMD failed to gain more marketshare

[ElMoIsEviL]

Massively ahead? Check out the overall cpu market share, it's a helluva lot less than 31% for AMD.

Intel have always sold more to business, everybody knows this. People buy Coke, they buy ipods, they buy Fords, they buy Marlboro, Gucci. And they buy PC's.

The idea that the general public is actively seeking 'intel' is a joke. Sure *some* people do, but the average pc buyer, first time/whatever simply couldnt care less.

Buyers do massively seek Intel though because Intel is marketed to a far greater degree. The Blue men, the Intel inside and the Core 2 campaigns have all been extremely successful.

Intel also assists major OEMs for their own marketing campaigns.

People are still prone to asking me what "Pentium" I am running when they see my PC. And more people know the name "Core" than they do Athlon (recognition wise).

Henri is quite dead on when he criticizes AMDs marketing strategies.

 

[Guest]

Jenny, that is only for Gaming. I do believe that AMD does very well with the gaming community. Still this only shows one part of the picture. It is also only for the Steam portal. What about WOW, what about Battle.net? Would the cpu usage move more towards AMD or Intel. I don't have that data. This also does not prove your point about Brand recognition. All it shows is that on Steam portal Gamers there use AMD processors in their system 31% of the time. Of that total group you are calling out, AMD usage is higher than market share that Intel currently has of ~81% for all CPU's. That shows that people who game on Steam recognize that AMD provides a good gaming platform.

You don't go from 81% to 69% market share for those reasons.

Intel sell a huge amount of their cpu's to business. The public really couldn't care less. The actual client market share of AMD cpu's is a lot higher than it should be if your idea that intel name makes *that* much of a difference.

Add it up. Even if AMD only holds 25% of the conusmer market, it is pretty damning evidence against intel's supposed 'brand' superiority. Very, very few of joe public will spend more on a pc just because it is intel. Enthusiasts will, that is why you can't believe it otherwise, but the average member of the public will take the cheaper choice a lot more than any so-called 'brand recognition' factors in to it.

 

[pausert20]

Well, Intel indicated that emerging markets gave them a big boost in Q4 earnings. Those people are average first time PC buyers. That means Intel's brand is doing something right. Unless AMD's results show them making over 1.7Billion next week with Gartner showing them knocking Intel's market share below 75% then Intel is the much more recognized brand even though AMD has a better price/performance advantage at the moment.

Keep flailing please. This is enjoyable knocking down your arguments. If I were a better person I would not but I'm small minded I guess.

I will endeavor to stay civil.

 

[Guest]

People are still prone to asking me what "Pentium" I am running when they see my PC. And more people know the name "Core" than they do Athlon (recognition wise).

But they won't pay MORE for it. You're just proving that you don't know a thing about real people. People will pay more for fashionable brands like Apple, they will not pay more for intel - only enthusiasts and fanboys will.

The rest of intels market share superiority is based purely on production capacity. With more capacity, AMD will eat more into the consumer market share, that is a fact and you can quote me on that one too.

 

[Chad Boga]

What are you on about?

If you could read and comprehend you would notice that brands like JP Morgan, American Express and Accenture are on there and people don't go shopping for them either do they?

Isn't that my point? Are you going to use this list as 'proof' that joe bloggs knows what intel does? Cuz if you are, I'm gonna use IBM at #2 as proof that you are talking crap.

The point is that in their respective fields, these brands have an edge over their rivals.

It DOES NOT MEAN THAT THEY ARE ALL IN THE SAME FIELD FFS.

Intel's rival is AMD, who of course don't feature in the top 100 brands.

It is your ridiculous assertion that Intel gains no advantage from having this better brand recognition.

Is it that you simply can't conceive of what the advantages of better brand recognition means to a firm?

So how come Pepsi owns ~45% of the world cola market? Coke at 1, Pepsi at 23...surely Pepsi should be nowhere to be seen if Coke had such a edge due to branding?

22 spaces isn't as big a gap as exists between Intel and AMD, which we know must be at least 90 + spaces.

What's more, market share doesn't always equal profit share. I'll bet that Coke is significantly more profitable than Pepsi.

Not even close. People might believe that intel 'make' computers but a very small percentage know that they make cpu's.

That is just your bullship assertion, refuted by many on this forum.

Maybe you are living in a time capsule from 20 years ago or you only hang out with women, but it is ridiculous to be claiming that hardly anyone buying a computer has no idea that Intel makes CPU's.

AMD holds 31% of the client cpu market apparently. Considering how much more intel can produce, that seems a bit off doesn't it? Well no. Joe Public buy AMD because it's cheap and good enough/better in a lot of cases. There goes your big brand idea - the public don't know, and if they do they couldn't care less anyway.

That doesn't make any sense. AMD at 31% are massively behind Intel's 68+% and again, market share does not equal profit share.

Intel are selling to the corporate sector, a bit like IBM. When AMD get the ability to make more chips, they will sell more chips because the public couldn't care less.

AMD aren't capacity constrained today, so what you said doesn't hold true.

What's more, with every passing year, people get more computer literate.

Even though this should be obvious from what I have previously said, you do realise that I am not saying EVERY PERSON in the USA or EUROPE knows what Intel produces, don't you?

I am stating that the majority of people who go to buy a computer know what part of the computer Intel makes before they hand over their dough.

Whether that is because they are computer literate or a computer literate friend clued them in, they will be more favourable disposed towards Intel.

That doesn't mean a guaranteed sale for Intel, but it is a great headstart to have.

 

[Guest]

Well, Intel indicated that emerging markets gave them a big boost in Q4 earnings. Those people are average first time PC buyers. That means Intel's brand is doing something right. Unless AMD's results show them making over 1.7Billion next week with Gartner showing them knocking Intel's market share below 75% then Intel is the much more recognized brand even though AMD has a better price/performance advantage at the moment.

Keep flailing please. This is enjoyable knocking down your arguments. If I were a better person I would not but I'm small minded I guess.

I will endeavor to stay civil.

Dear oh dear I do hope you are trolling now.

Emerging markets? AMD are barely even competing in those yet. How many of intels $10 billion revenues last quarter came from China/Far East? Well I'd say $5 billion probably, seeing as it was $4 billion out of $8 billion revenues the quarter before.

Nothing at all to do with the intel brand, and everything to do with intels production capacity - capacity that AMD cannot match currently.

 

[pausert20]

You don't go from 81% to 69% market share for those reasons.

Intel sell a huge amount of their cpu's to business. The public really couldn't care less. The actual client market share of AMD cpu's is a lot higher than it should be if your idea that intel name makes *that* much of a difference.

Add it up. Even if AMD only holds 25% of the conusmer market, it is pretty damning evidence against intel's supposed 'brand' superiority. Very, very few of joe public will spend more on a pc just because it is intel. Enthusiasts will, that is why you can't believe it otherwise, but the average member of the public will take the cheaper choice a lot more than any so-called 'brand recognition' factors in to it.

Not sure why you are using this in your argument. This is only one group of Gamers. I listed WOW and Battle.net as others that might lend evidence to your supposition. So far your evidence does not add up in the consumer market. You have one data point listed. Verndewd already answered you that this share is most likely do to older systems still being used. I can agree with what he says but it also might be you are correct in your consumer statement that Intel should be higher and is not because AMD systems are priced at a better value than Intel's.

Okay. I think I can figure out the point you are trying to make after re-reading you post about 8 times.

Your whole argument is that John Q public if it realized and agreed with intel's high brand recognition it would show up as a lot higher percentage of used Intel processors on Steam's database than it does. Again, you are only making one data point. You can't base any trend on that. You can't really say anything about the 31% except that on Steam 31% of computers use AMD processors. You can't extend your logic further than that unless you can provide additional data backing up what you presented from Steam's database.

I will await more data to back up your statement that Intel Brand Recognition means nothing to the average PC consumer. I don't agree with with you but since you brought up this line of thought you need to support it more fully to win any one over here on Tom's Hardware I would think.

 

[pausert20]

Dear oh dear I do hope you are trolling now.

Emerging markets? AMD are barely even competing in those yet. How many of Intel's $10 billion revenues last quarter came from China/Far East? Well I'd say $5 billion probably, seeing as it was $4 billion out of $8 billion revenues the quarter before.

Nothing at all to do with the Intel brand, and everything to do with Intel's production capacity - capacity that AMD cannot match currently.

Here you are trying to equate Brand recognition with a companies production capacity. I agree AMD can't match Intel's production capacity. I would also think that AMD would be doing gang busters in any emerging market because as you have indicated previously that AMD is the cost competitive leader especially in the cost/performance category. This means a lower cost to the end consumer which should play very well in emerging markets.

But it seems Intel is doing very well there. Does this mean you are saying Intel is the cost/performance leader in the emerging markets? If that is what you are saying then does that mean AMD's production capacity is preventing them from getting the jump on Intel in those markets.

You seem implying 2 mutually opposite statements here. AMD can't compete in the emerging market space when they should be because their systems should cost less than Intel's. Or you are implying that Intel is doing great in those markets do to their Brand recognition despite they are not the cost/performance leaders?

Am I reading you right here?

 

[JAYDEEJOHN]

Id remind everyone, the OEMs ARE the people. Their designs arent that expensive.
Id also remind people that the heads at HP didnt let on to the board the full details of the "rebate" program, and even tho the board may expect alot from its CEO, he still makes the choices, and having AMD more often than before, because of certain things, can happen, as Im sure the board themselves didnt like being implicated by Intel fanbois saying Dell and HP should be sued as well, and what this looks like in public. Common denominator:Intel.
Having Otellini being quoted on Michael Dell Im sure didnt go over well at Dell either.
Again, same applies to Dell, and makes their shareholders look a lil more closely and tentatively as well.
So, and changes away from Intel would certainly easily be forgiven, large ir snall, but we really all know, some things arent meant to show the real reasons for certain comments, and Im sure AMD will sell, because to average Joe, its a Dell or a HP isnt it? Or, exactly why did Intel try to keep AMD out? I mean, they ARE Intel arent they?

 

[randomizer]

Sonoran, I don't doubt your figures at all, but because I would like to inform others on different sites, do you know of a link that breaks down the compiler percentages between MSVC, GCC, ICC and whatever else is out there?

I've asked for that several times and nobody has produced such data. It's all heresay.

 

[JAYDEEJOHN]

Thats bwhy I wont waste time on the compiler issue, too many unknowns, and needs alot more than we can bring without major headache in doing so, to really get a grasp to its extent.
Thus it "may" or "may not" be important, and time will tell, as Im sure the judge will find people to sort it all out, then we will al know

 

[someguy7]

How would joe clueless even know how the two pcs he is looking at compare anyways. So how would average joe so even come to the conclusion to spend more for the same performance just because it has Intel in it.

The average person will go into a store looking to spend lets say 800 bucks on a machine. If they see two pcs that fit under that price with one being AMD and the other Intel the consumer will go with Intel more often do to the name recognition. Its just that simple. How is a consumer that doesnt even know that Intel makes cpus come to the conclusion he is paying more.


You cant say that average consumer doesnt even know that Intel makes cpus. Then say the average consumer will not pay a premium for the Intel brand. The customer we are talking about will not know what he is paying for. He will not know how the machines perform against each other so it is impossible for the clueless to actually decide to pay more for Intel brand. They will just buy the friggin brand name they know.

So the joe average consumer that doesn't even know that Intel makes cpus is going to be able to look at a Intel and AMD machine and compare the cost/performance? Fail.

 

[JAYDEEJOHN]

Point here is, if that same consumer sees a 600$ PC his friend has, and it performs "good enough", and it has an AMD in it, his next purchase may not be Intel bound.
This is word of mouth, but also consider, if AMD has compelling wins for the OEMs at certain price points, alot of those average Joes will be seeing Dells etc using AMD chips.
Also, like Ive said before, sometimes HP is more important than Intel, or Dell etc, and the cpu is a PC thingy, as long as he/she gets his/her Dell/HP etc

This was denied previously, which brings it home as being quite obvious, that the reasons I just mentioned are quite real, and well known to Intel , which has hled its market dominance, and if it werent important, thered be no "rebates" to begin with. as average Joe just doesnt only use the Intel name in their pruchasing

 

[verndewd]

How would joe clueless even know how the two pcs he is looking at compare anyways. So how would average joe so even come to the conclusion to spend more for the same performance just because it has Intel in it.

The average person will go into a store looking to spend lets say 800 bucks on a machine. If they see two pcs that fit under that price with one being AMD and the other Intel the consumer will go with Intel more often do to the name recognition. Its just that simple. How is a consumer that doesnt even know that Intel makes cpus come to the conclusion he is paying more.


You cant say that average consumer doesnt even know that Intel makes cpus. Then say the average consumer will not pay a premium for the Intel brand. The customer we are talking about will not know what he is paying for. He will not know how the machines perform against each other so it is impossible for the clueless to actually decide to pay more for Intel brand. They will just buy the friggin brand name they know.

So the joe average consumer that doesn't even know that Intel makes cpus is going to be able to look at a Intel and AMD machine and compare the cost/performance? Fail.

what we need is a mass poll, I think 80% dont even know what a cpu does they just know brand names, and mostly intel and mac.

 

[JAYDEEJOHN]

No disrespect here, but to prove my point of how important OEMs are over cpus, all Ill say is Apple, and their marketshare.

 

[jimmysmitty]

Using Steam as a way to verify data..... Well lets look at the facts shall we?

Steam is a gaming digital distribution platform created by VALVe that hosts tons of games. It started in 2004 with the release of Half Life 2. Since we do not know if they just poll current hardware or keep old hardware and just update numbers its hard to say how much of that is current or old specs. Hell it might still count my old Pentium 4 system in there.

But if you look at the trends with it from August 09 to December 09 AMDs CPU share slowly went from roughly 33% to just over 30%. While it might not seem as much it goes to show that Intel is being bought up faster for those who use Steam than AMD. If it continues AMDs share might hit 25% or lower in 2010 unless AMD can produce something better than Intel and market it better than Intel and as well supply it as well as or better than Intel can.

Problem there is that AMDs marketing sucks.

Look at it this way: Since the release of the HD4K series, ATI has had the price/performance ratio in the bag. A 4870 1GB is better in price and performance than most G200 series GPUs from nVidia. But nVidia still holds near 70% of the gamers PCs via Steam. Hell according to Steam Intel only holds 5% but in the real world Intel holds the majority of graphics in PCs.

So in short, while Steam is nice and its data farming is a great way for VALVe to see PC trends in order to know how far they can push Source, its not easily useable for who is better yadda yadda since we do not know what they keep and what they throw out.

As for the issue jenny keeps pushing, it is correct that Intel can out do AMD capacity wise. I will even bet that GF wont be able to match Intel since they have been signing other companies thus AMD wont get every last FAB plus there will be different FABs for different things.

BUT Intel is a recognized brand. A lot more people who are non PC savvy know Intel and don't know AMD. As I Said my grandfather knew Intel but not AMD. My fiance as well. Hell most of my family knew who Intel was and learned about AMD through me.

 

[Guest]

How would joe clueless even know how the two pcs he is looking at compare anyways. So how would average joe so even come to the conclusion to spend more for the same performance just because it has Intel in it.

The average person will go into a store looking to spend lets say 800 bucks on a machine. If they see two pcs that fit under that price with one being AMD and the other Intel the consumer will go with Intel more often do to the name recognition. Its just that simple. How is a consumer that doesnt even know that Intel makes cpus come to the conclusion he is paying more.

Sure given 100 near-identical pc's 99/100 somebody would choose intel. Then you say 'the AMD is $50 cheaper', and 99/100 buy the AMD instead...or they would if they had the same level of choice available.

You cant say that average consumer doesnt even know that Intel makes cpus. Then say the average consumer will not pay a premium for the Intel brand. The customer we are talking about will not know what he is paying for. He will not know how the machines perform against each other so it is impossible for the clueless to actually decide to pay more for Intel brand. They will just buy the friggin brand name they know.

People go into shops like PC World every day and see hundreds of pc's lined up running the same stuff. Now a lot of them went with the idea of buying an intel and leave with an AMD instead - almost 1 in 3 in fact. If intels brand is so superior, why is that?

Is it down to AMD's non-existent marketing? You can't have it both ways, either AMD is doing something right marketing-wise or intels consumer brand is weak at best.

So the joe average consumer that doesn't even know that Intel makes cpus is going to be able to look at a Intel and AMD machine and compare the cost/performance? Fail.

He's going to buy the AMD because its cheaper and by all accounts runs the same. He may have had the notion of buying intel when he left his house that morning, but after seeing the price tags he realised intel wasn't worth it. That is the power of the intel brand to the average joe.

 

[Guest]

BUT Intel is a recognized brand. A lot more people who are non PC savvy know Intel and don't know AMD. As I Said my grandfather knew Intel but not AMD. My fiance as well. Hell most of my family knew who Intel was and learned about AMD through me.

Sure most people have *heard* the name intel and most haven't heard AMD.

Given two identical pc's, that is why 99/100 would choose the intel. However, given $50 off the AMD, 99/100 would choose the AMD. That is the real strength of the intel brand.

People will pay $50 more for Apple (actually a lot more), more on designer clothes etc.

 

[fazers_on_stun]

That being said Henri is a dumbass. geeze , talk about crapping in your own bed.

Looks that way, but I'd want to see the entire comment Richards made so as not to have the quoted portion taken out of context. Doesn't make sense for a highly-paid marketing VP to be trashing the products he's supposed to be selling...

 

[fazers_on_stun]

The FTC case will be heard before an administrative law judge next year, possibly in September, the FTC said. Whichever party loses can take the case before the full commission for review. If Intel loses before the commission, it can ask for a review by the U.S. Court of Appeals in any state where the company does business. If that fails, Intel could then take the case to the Supreme Court, the FTC said. The commission can’t take the case to outside courts. [/i]

The FTC will likely have several new commissioners by the time the ALJ renders his or her decision anyway, some 2-3 years after the trial starts typically, and they could conceivably just drop the whole thing if the ALJ decision is unfavorable to Intel.

 

[Chad Boga]

Sure most people have *heard* the name intel and most haven't heard AMD.

Given two identical pc's, that is why 99/100 would choose the intel. However, given $50 off the AMD, 99/100 would choose the AMD. That is the real strength of the intel brand.

Intel and AMD's respective Gross Margins prove you wrong, again.

 

[fazers_on_stun]

I have a link to an article showing that AMD was capacity strained AFTER all this happened when they finally got Dell. That means that at the time before Dell and AMD, AMD still had capacity problems. Should I link it again for you so you can skip over it?

Chad, jennyH is of those who think that AMD is a angelic corporation who cares for them. She also thinks that Intel is the devil, pure evil and that the other corporations are righteous and wont stand for any of this!!!

Its all a day dream.

Please do post the link. And as I said before, AMD's other OEM customers were pretty upset with AMD after they got the Dell contract and shorted said other customers. It's rather simple business logic - if you know full well you cannot deliver on your contracts, then don't make them.

 

[fazers_on_stun]

If that was true I'd be getting paid here on THG. 😀

LOL - touche! That one made me laugh .

 

[Guest]

Intel and AMD's respective Gross Margins prove you wrong, again.

Always the cry of the defeated intel fanboy. 😗

What exactly has their gross margins got to do with this? Just face up to it, intel are known in the corporate sector just like IBM are, the average punter couldn't care less about either.

 

[Chad Boga]

Always the cry of the VICTORIOUS

Actually whilst it obviously has some relevance, I should have stated instead ASP(average selling price), which shows that Intel is able to command a price premium due in no small part to the strength of their brand.