CPU Sales Up 39 Percent In Q1; AMD's Revenue Share Slips Despite New Launches

IDC's latest report on CPU revenue and market share for Q1 2010 confirms results we saw when Intel reported its record first quarter earnings. According to the research firm, the CPU market fell just 5.6 percent from Q4 2009 to Q1 2010. Historically, CPU sales fall 8-10 percent over the same period; IDC's figures lend credence to the idea that the IT recession is beginning to break.

"PC processor shipments typically decline around 7 to 8 percent going from fourth quarter to first quarter," said Shane Rau director of Semiconductors: Personal Computing research at IDC. "A decline of 5.6% is modest and wouldn't mean much by itself. However, after the huge rise in shipments we saw in the fourth quarter, it adds more credibility to market recovery and that the PC industry anticipates improvement in PC end demand in 2010."

Broken down by segment, mobile PCs declined the most at 6.3 percent, probably thanks to the precipitous drop in Atom shipments in Q1. Falling volumes were offset by rising ASPs which were up 4.1 percent. That gain, however, is almost entirely on Intel's side; AMD executives confirmed during company's Q1 conference call that its own ASPs had improved due to a better product mixture as opposed to any actual uptick in CPU pricing.

Intel gained market share in all three segments despite AMD's extremely competitive server pricing and new 8-12 core processors. Santa Clara earned 81 percent of the overall unit market share in Q1, a gain of 0.5 percent, while AMD took 18.8 percent (a loss of 0.6 percent). By segment, Intel snatched 87.8 percent of mobile sales (up 0.5 percent) 90.2 percent of server/workstations (up 0.4 percent) and 71.7 percent of desktop sales, up 0.6 percent.

AMD's new six-core desktop processor. Behold Thuban, aka Instanbul, aka Constantinople.

AMD has a chance to reverse these trends in Q2 thanks to the aforementioned server products and the company's impressive six-core processor that popped up just this week. Both launches play to the company's historic strength in servers and desktop technology; we've a feeling it'll still be awhile before we see AMD earning major ground in mobile.

Farther Ahead

Like Intel and AMD themselves, Rau isn't willing to commit to a major corporate refresh cycle in 2010 and chooses to focus on consumer projections instead. He predicts shoppers will want "more value than just low price in their PCs...In terms of the processor, that means more openness to paying for benefits such as good performance and reduced power consumption that serves long battery life."

Good performance is a given; Intel's new ultra-mobile Core processors are scrumptious looking, but improved battery life isn't an obvious sales point for 2010. The last two years have been about netbooks—thin, light, consumer-driven products with "good enough" performance and batteries that could last past 10 hours. From where we sit today, 2011, not 2010, will be the year to watch in terms of significant power reduction.

Intel's 32nm Atom will launch in the latter half of 2011, AMD's own netbook-aimed Bobcat core should be available around the same time, and we might even start to see the first OLED displays on thin-and-light systems.