Advanced Micro Devices Inc (AMD)

[KeithDust2000]

New Pavilions show increasing HP support for AMD chips
Out of nine new a500 series Pavilions, seven use AMD's processors

http://www.infoworld.com/article/04/04/01/HNpavilions_1.html

By Tom Krazit, IDG News Service April 01, 2004



Hewlett-Packard Co. (HP) has quietly begun selling a new series of Pavilion PCs, revealing a growing interest in using Advanced Micro Devices Inc.'s (AMD's) processors in its desktop systems.
Of the nine new a500 series Pavilions, seven use AMD's processors. Limited details about the HP Pavilion a550e, a550y, a530e, a510e, and a500y PCs were available on HPshopping.com Wednesday afternoon, and by Thursday, the full specifications were available on HP's site. An HP spokeswoman confirmed the PCs are currently available.

On HPshopping.com, the a550e and a530e will come with AMD's Athlon 64 processor, while the a510e uses its Athlon XP chip. The other new Pavilion 500 series systems available on HPshopping.com use Intel Corp.'s Pentium 4 and Celeron processors.

Four additional a500 series PCs with AMD processors are available through Fry's Electronics Inc.'s Outpost.com Web page, said Toni Duboise, an industry analyst with ARS Inc. in La Jolla, California.

HP has been the largest PC vendor to support AMD's chips on the desktop, with Dell Inc. declining thus far to do so. The new PCs, along with the release of four HP a500n series PCs with AMD processors, suggest that HP is shifting to the AMD product line for its Pavilion desktop PCs, Duboise said.

"While it is true that HP has been a long time proponent of AMD, the fact that four out of the first (retail) 500 series models sports an Athlon CPU is big news. Intel is surely not pleased about the exclusion of the Celeron CPUs within HP's mainstream value segment, but ARS feels this move is directly connected to the recent increased success of AMD-powered desktop machines sold within the retail marketplace," Duboise wrote in a recent research note.

Gateway Inc.'s eMachines division did very well in retail stores with Athlon 64 and Athlon XP PCs earlier this quarter, and HP did not want to concede that market, Duboise said.

Last quarter, eMachines released an AMD desktop with a multifunction DVD drive for less than $800 that drew much interest from retail consumers, Duboise said. HP's new a500n systems aren't always cheaper than their eMachines rivals, but they are close enough in price to take back some of that business, she said.

HP's new product launches as well as the success of the AMD-based eMachines PCs show that "it appears as if HP is intent on increasing its share of that AMD pie," Duboise wrote in her research note.

However, HP's support for Intel's desktop processors on HPshopping.com remains strong, with Celerons and Pentium 4s included with the majority of the PCs sold under the Compaq Presario brand on HP's Web site. And the vast majority of HP's notebooks, the fastest growing segment of the PC market, are solidly within the Intel camp.

ARS expects HP to roll out Celeron and Pentium 4 desktops for the retail market soon, as opposed to just selling them directly at its online store. HP won't want to ignore its historical ties with Intel as well as that company's higher brand recognition among retail customers, Duboise said.

Since July of 2003, Intel PCs have made up about two-thirds of the retail market for preconfigured Pavilion PCs, while AMD has captured about one-third of that market, according to data from NPD Techworld in Reston, Virginia. Data for build-to-order PCs sold through HPshopping.com was not available.

The numbers tend to fluctuate at certain periods, such as the fourth quarter holiday selling season, said Stephen Baker, director of industry analysis at NPD Techworld. "(HP) is pretty willing to use what they think they have to use to remain competitive," he said.

------------------------------------

WTF???