Mercury Research: Mobility Driving the Microprocessor Market

A strong consumer market coupled with more IT departments refreshing outdated PC fleets led to one of the strongest quarters in the x86 microprocessor market in nearly nine years, according to an Oct. 29 report from Mercury Research.

In the third quarter of 2007, unit shipments of x86 chips increased more than 15 percent compared to the same time last year, which made it the strongest quarter of growth since the third quarter of 1998. Sales of notebook processors led the surge, increasing by 26 in the third quarter, according to Mercury, which measured the number of microprocessors shipped during the quarter.

The report also showed that the market share between Intel and Advanced Micro Devices—the two leading producers of x86 processors—remained about the same compared to the third quarter of 2006.

Resource Library:

Intel remains the market leader with about a 76.2 percent market share, while AMD is a distant second at 23 percent. In 2006, Intel held a 76 percent market share compared to AMDs 23.3 percent share.

The Mercury Research report, along with other reports recently released by IDC, seems to show a robust PC market. Part of that growth is driven by mobility, with more consumers and enterprises seeking out laptops as a viable alternative to the traditional desktop. This drive has led to increased demand and the increased competition between vendors has helped lower prices for notebooks.

Intel and AMD have plans for your notebook. Click here to read more about it.

In addition, both AMD and Intel have been battling in this space—both report record notebook processor shipment during their latest financial disclosures—and the resulting price war has led to lower average sales prices for notebooks processors. The result has been PC vendors passing the savings onto the buyer in the form of low-end, less expensive notebooks or high-end laptops that have better technology but remain affordable.

The push toward more notebooks has also refocused how the chip markers market and sell their processors. Instead of pure clock speed, AMD and Intel have begun focusing more on processor design and issues like the power efficiency of their mobile chips.

Dean McCarron, an analyst at Mercury and the author of the report, found that many corporate IT departments are buying and upgrading to new PCs, which helped drive the processor market during the third quarter.

"Clearly, there are a lot of different dynamics to what is going on in the market," McCarron said "There is really strong consumer demand and there are some indications that we might be at the beginning of a corporate refresh cycle."

In addition, the market was helped by the emerging markets, especially China, which are rapidly buying more and more PCs and servers, which might be help explain the sudden boom in the x86 market at a time when shipments to mature market, like the U.S., remain flat.

Check out eWEEK.coms for the latest news in desktop and notebook computing.