AMD's New Duron: Now at 1GHz

AMD’s Pricing

Recently, Intel’s Pentium 4 has been gaining ground on the Athlon in terms of performance.  Especially in games, Intel’s upcoming Pentium 4 2.0GHz will be able to offer significantly higher performance than the Athlon.  In spite of this, the Pentium 4 continues to fall behind in our recommendations.  The main reason is AMD’s very aggressive pricing.  Currently, every single desktop AMD processor is available for under $130; that includes the fastest AMD Athlon now running at 1.4GHz.  Remember how excited we all were when we could find the fastest processors for $300?

The pricing on AMD’s Duron line is even more aggressive.  The 700MHz Duron that was introduced last June can now be found for $25.  This is cheaper than VIA is able to even make their lowest speed C3 processor.  Even the new 1GHz Duron is still officially only $89, with street prices almost guaranteed to push it much lower.  Without a doubt AMD’s cash crop is still the Athlon processor.  The Duron has gotten much more attention than it used to back when there were no platforms available for it, but it’s still not AMD’s primary focus. 

Aggressive pricing across their processor line has a few effects.  First of all, it almost completely avoids the problem of people using Athlon MP processors for their uniprocessor desktop systems.  The price premium you pay for an Athlon MP is generally not worth the performance benefits over an Athlon 1.4 for example. 

The second effect is that it is absurd to even think of any other chip manufacturer’s CPUs at this point.  Intel will aggressively drop prices on their Pentium 4’s at the end of this month but they will still be priced higher than AMD’s solutions on equivalently performing parts. 

The third effect and quite possibly the most significant actually has two parts to it.  On the one hand, this is helping AMD gain exactly what they need, market share.  On the other hand, AMD does not enjoy the higher profit margins that they once did.  Selling a Duron for $25 isn’t exactly going to be raking in the dough; this will eventually have to change as AMD grows both in size and in market share.  Enjoy it while it lasts.

New Competition

With the pending release of the i845 chipset from Intel, the Athlon and Duron will have a new competitor: the Pentium 4.  The Pentium 4 has been aimed at the high end of the market ever since its release, but now with a PC133 SDRAM chipset on the way Intel will begin positioning the “lower” speed grades as entry level solutions.  If you look at this from an enthusiast’s perspective, you’ll know that the Pentium 4/i845 combination isn’t the best option but that’s not what both AMD and Intel are concerned with.

The corporate IT market is where both companies are currently battling it out in order to gain those large contracts.  AMD is working non-stop to figure out how to gain more market share in the corporate world.  While they’re at around 30% in the desktop market, AMD processors are only at 20% in the corporate market.  Intel is positioning the Pentium 4 + i845 solution as the ideal solution for corporations because of its low cost and support for regular PC133 SDRAM.

This means that moving forward, the Duron and lower priced Athlon platforms will have to go up against the 1.4 and 1.5GHz Pentium 4s on Brookdale (i845) motherboards.  The release of VIA’s P4X266 chipset complicates things even more as it will be competing with both the i845 and i850 chipsets.  So there may be some desire to introduce P4X266 platforms into the same market that would have otherwise been serviced by the i845. 

By the end of this month the Pentium 4 1.5 and 1.4GHz processors will both be priced at below $140.  This still makes them more expensive than competing AMD solutions but much, much closer in price than they once were.