With today's introduction of the Athlon processor, AMD will begin its effort to wrest away Intel's dominance in the high-end PC category, but industry analysts said AMD must still prove it can ship high-frequency processors in large numbers.
According to AMD, the Athlon contains technology above what is delivered by Intel's latest Pentium III offerings, which were released last week. The Athlon is available in 550MHz, 600MHz and 650MHz speeds.
The processor uses seventh-generation chip architecture that AMD hopes will create a niche for itself outside the entry-level PC market, eventually landing in workstation-level PCs.
"The Athlon will enable AMD to gain the high-end business, and the Athlon will place us above Intel," said Robert Fuller, AMD's director of field marketing.
The Athlon is positioned to compete against Intel's upcoming Willamette processor, said Fuller, while the rest of AMD's line will match up as follows: The K6-III will go against the Pentium III, and the K6-2 with 3D Now will be against the Pentium II and the Celeron. The Athlon's micro-architecture in-cludes superscalar floating-point engine and a 200MHz system bus.
Max Baron, processor analyst for InStat, Sunnyvale, Calif., said the 200MHz system bus is a significant performance enhancer for the Athlon, and the fact that it is multiprocessor-compatible means it is positioned to take on Intel in the server market.
AMD has proved it can deliver a processor that works as well as Intel's lower-speed models, Baron continued. And AMD's pricing structure is also favorable with the Athlon, costing about $200 per processor to the $425 charged for the Pentium III 500MHz.
However, this favorable situation could still come to naught for AMD, he said. "The bottom line is can it [AMD] supply the Athlon in volume, and if they can, what will Intel's response be. Intel could quickly come out with a 700MHz or 1GHz processor, and if it does, this means Intel's internal processors are better and ahead of AMD."
AMD's Fuller, meanwhile, said the primary challenge for AMD is gaining the trust of the business customer, because these consumers are only willing to buy a PC that uses a processor that they trust -- and right now, that's Intel.
George Iwanyc, processor analyst for Dataquest, San Jose, Calif., agreed with Fuller's assessment, and said, "The Athlon does seem to be a good performer, but AMD's problem has always been execution and not the processors."
AMD is bringing its Austin, Texas facility up to full speed and is opening a new factory in Germany later this year, Fuller noted. AMD will also introduce several additions to the Athlon family that by year's end will push the processor speed above 1 gigahertz.
In the past several months Intel has beaten up AMD in the low-end processor market and has gained back much of the market share, Fuller admitted, but the Athlon should remove some of the price pressure.
Last Monday, Intel began shipping a 600MHz version of the Pentium III and a Celeron 500MHz.
"Intel's most effective weapon is price. The Athlon will place AMD above Intel, so Intel won't be able to cut prices on higher end processors," Fuller said.
Iwanyc said the Athlon's placement does put AMD in a stronger position to compete with Intel.