At the high end of the PC market, Intel (INTC +4.36%) has had a performance, power, and market-share lead over smaller competitor Advanced Micro Devices (AMD +18.37%) for years. However, in the low end of the market, Intel's competitive positioning hasn't been as good, with AMD offering products superior to Intel's in many key ways. With its latest Bay Trail architecture, Intel has been aggressive in trying to win back lost share at the low end of the PC market and has leveraged its learning from mobile to do so at a good cost structure.
With both AMD and Intel refreshing their respective product lines ahead of the all-important back-to-school season, investors should keep a close tab on the upcoming battle for design wins and customer dollars.
AMD is much more competitive here -- Intel can't afford to rest
AMD is quite competitive in the low end of the PC market with its "Cat" core based products (the latest core is known as Puma and the latest PC SoC implementation is known as Beema). Indeed, AMD's had historically offered much better CPU and GPU performance than the prior-generation Atoms that Intel released into this market, and a more elegant solution relative to the disabled, relatively expensive-to-build Core-based Celeron and Pentium products.
That said, while Intel has more than fixed its cost structure problem at the low end by bringing to bear its newly designed Atom architecture (and, as the recent quarterly numbers show, it is fixing its low-end market share problem), it can't afford to rest. The initial crop of Bay Trail-M processors had to compete with AMD's Kabini last year, but this year AMD has stepped it up with Beema.
AMD's Beema significantly improves on Kabini; Bay Trail-M improves, too
AMD's Beema for notebooks improves upon its predecessor pretty nicely. The top bin model (the A6-6310) clocks the CPU in at 2.4GHz, up a cool 20% from the Kabini equivalent. Graphics clock speeds are also up nicely from 600 MHz to 800 MHz in that top SKU. These improvements trickle down across the lineup, but for the purposes of this discussion, comparing the best from each camp is enough. Oh, and for good measure, AMD rates the Thermal Design Power of that part at 15 watts.
Intel's Bay Trail-M gets a bump, too. The highest-end Silvermont-based (that's the low-power Atom core) Pentium N3540 gets a top CPU clock speed bboost from 2.4GHz to 2.66 GHz, and a graphics frequency increase from 854 MHz to 896 MHz. The boost isn't anywhere near as dramatic as the improvement that AMD did for its top-end SKU, but it's important to note that Intel lists the Max TDP of this part at 7.5 watts, which means that, in theory, the Intel part should require less aggressive cooling solutions.
Watch the revenue numbers for back-to-school
These launches are both timed to make it into systems for the back-to-school selling season, meaning that these systems will be on the shelves in the July/August timeframe. It will be interesting to keep an eye on what designs Intel and AMD both win for this important selling season, but sell-through of those designs is ultimately what matters. The tale will be written over the next several quarters, and once those numbers are in, we'll have a pretty good sense of how the market share dynamic played out at the low end of the PC market for both companies and what next year could look like, as both Intel and AMD advance their designs to 14-nanometer and 20-nanometer manufacturing technologies, respectively.
