Introduction

Clearance sale on every aisle!

With AMD's price cuts last Monday, we're guessing many of you are thinking about purchasing an AMD processor. For instance, 1GHz "Thunderbird" Athlons are now selling for less than $500 at many online retailers, putting the price/performance ratio of the entire Athlon family at an all-time high. With the Athlon processor doing so well for AMD, why would they dramatically reduce Athlon prices so suddenly? The answer is pretty simple -- to increase market share.

As you may recall, in June AMD officially launched their Duron processor for the budget PC market and Athlon with performance enhancing cache memory (better known as "Thunderbird") for the performance PC segment. Unfortunately for AMD, Duron was launched too late for Tier One system manufacturers such as Gateway and Compaq to include the processor in their back-to-school product lineups.

For example, a quick search of the Gateway website yields no results for Duron systems. At the time of this articles' writing, Gateway's budget "Essential" line is composed entirely of Celeron and Pentium III processors. Over at Compaq, similarly configured Pentium III and Celeron systems are the only processors available for their budget lineups (the Presario 5000 and Presario EZ2000).

It turns out that the back-to-school shopping season is one of the strongest times of the year for sales. The designs for these PC's were finalized just before the Duron officially launched.

With Duron missing one of the most important portions of the year, AMD feared Intel's Celeron and lower speed Pentium III processors would grab market share in the sub-$1,000 PC segment. So what does AMD do to combat this threat? Drop prices.

The ramifications

By lowering prices on their Athlon line of processors, AMD has accelerated the Athlon's transition to that of a budget processor. At many online retailers, Socket A Thunderbird processors can be found within $20 of Duron 700s. With these low prices, AMD is hoping the Athlon 700 and 750 will fill the void in their budget PC lineup for the back-to-school season, with higher-speed Athlons continuing to gain ground in the performance PC segment.

Duron systems from Tier One vendors should begin to appear during September, just in time for the holiday buying season. AMD is also expected to launch a 750MHz version of the Duron (reportedly with a higher core voltage) and a 1.1GHz Athlon at the end of this month.