A Peculiar Kind Of Bias

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The AMDroids Have Outdone Themselves

I cite information from AMD executives, and I get called Intel-biased. Now THAT’S a new one on me!

Per market share, for the second quarter, this quote from the 2Q 2001 Conference Call.

“Latest industry market research indicates we continue to gain market share reaching a level in excess of 22%.”Jerry Sanders, Chairman and CEO, AMD

For the third quarter, this quote from the 3Q 2001 Conference Call.

“We believe we held unit market share in the 22% range.”Bob Rivay, Senior Vice President and Chief Financial Officer with AMD

For the fourth quarter, this quote from the 4Q 2001 Conference Call.

“We believe we held unit market share in the 20% range.”Bob Rivay, Senior Vice President and Chief Financial Officer with AMD

So please, don’t write me with claims of Intel-bias. Go write the executives of AMD and tell them that they’re Intel-biased. Or get a grip on reality.

Spin-Doctoring The Results

A few folks cited this article as “proof” AMD increased market share.

The article says two things:

It does report AMD’s market share increased from 16-17% from the same quarter last year to 20% now. That is true. What happened was AMD’s marketshare jumped up quite a bit the beginning part of the year, then dropped back down somewhat the second half of the year.

AMD and Intel don’t compete against each other only three months a year, though. They compete twelve months a year. You can say AMD has more marketshare than it did a year ago and less marketshare than it did six months ago, and both statements are true. What happened was AMD’s marketshare jumped up quite a bit the beginning part of the year, then dropped back down somewhat the second half of the year.

The current trend is downward, though, and there will be no dramatic upsurge in the first half of 2002.

“For the first half, year on year comparisons will be difficult. . . Meanwhile, we are assuming normal seasonal patterns for the current quarter. . . . [We] believe we will maintain PC processor unit sales at or near record levels and ASPs at or near the 90 dollar level of the just completed quarter.
On balance, we believe it appropriate to project a sequential revenue decline to the 2 – to the 900 million dollar range with a small loss.”
——Jerry Sanders, Chairman and CEO, AMD

In short, Jerry doesn’t expect things to change much in the first half, and he’s probably right.

Jerry is much more optimistic about the second half:

” . . . we expect 20% year on year growth in the second half, setting the stage for an industry barn burner in 2003, which will be, incidentally, the year of the Hammer, and present an unprecedented opportunity for AMD.”

I think he’s probably right there, too, if for no other reason than it will cost AMD less to make .13 micron chips, and increasing demand later in 2002 will probably keep ASPs relatively high.

The ZDNet article also points out some as-of-this-moment unpublished research by IDC Research. This report, based on preliminary sales figures (though IDC’s preliminary estimates have been pretty good in the past) is supposed to indicate an increase in AMD’s market share.

What we don’t know is what periods they’re comparing. If they compare year-to-year, I don’t doubt they’re right. If they say AMD increased market share over what they had in the third quarter, that would contradict what both AMD (and Intel) are saying.

I believe IDC will have a press release later today, and I’ll certainly note it and comment on it.

Update: We have a news item on the IDC report which indicates worldwide PC shipments were 34.2 million units. AMD had said they shipped 7.8 million processors. If you divide 7.8 into 34.2, you get a little over 23%, but then you go back to AMD saying they got 20%.

There’s a number of possible explanations for the discrepancy, and this has happened before, though not to such a degree. Perhaps it’s XBox?

We’re Not Cheerleaders

We don’t take sides. We don’t report just good things, and ignore the bad ones. If anything, we focus on the bad ones and the negative items just because too many other places don’t.

It’s unintentionally very funny to get notes from people calling us Intel cheerleaders when it’s blatantly obvious what they want is AMD cheerleaders instead (or vice versa).

I get Email Number One saying that I always favor Intel. I get EMail Number Two saying I always favor AMD. I can’t do both at the same time.

Maybe it means we’re being impartial?

Why Hide The Truth?

Any company is going to have good things happen to it and bad things happen to it. It’s called life. So why try and deny it?

What happened last quarter is that AMD sacrificed a little marketshare in return for a higher price for its processors. It was a tradeoff, and an understandable one for those responsible for keeping the company afloat.

When Intel rose to the challenge, AMD retreated a bit until they’re in better shape to try again. That looks like 2003. This approach looks a good deal saner and realistic than the earlier plan. Not good news for those who wanted to carve: “Intel–Born 1971, Died 2002” tombstones, but that was hardly realistic, anyway.

When this kind of tradeoff occurs, you can’t report just one side of it. You have to take the bad with the good. In this arena, the cause should never be more important than the truth.

Even if you can’t believe that, denying reality doesn’t change it.

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