Advanced Micro Designs (AMD) and its advocates like to point out that AMD "outsold" Intel in January for the first time, and heck, even Intel would like the world to believe it in light of their upcoming trial with the FTC. But the truth is that Intel vastly outsold AMD once again in January and that AMD only came out ahead in one area: Retail sales of sub-$1500 machines. And this sector of the market makes up only 9% of the total microprocessor market, which is worth over $125 billion right now.
Intel responded slowly to the low-end of the market, preferring to stick to its old model of introducing high-end chips and letting its previous high-end models filter down the line. But a strong showing by AMD with its K6 line, including its recent 400 MHz K6-2 with "3D Now" technology, forced Intel to reconsider its plans. In 1998, the company introduced the ill-fated first edition Celeron, which was basically a sabotaged Pentium II with no L2 cache. Press and customer reaction was, shall we say, muted at best, and Intel responded yet again with faster Celerons that featured quick L2 cache and competed with its own Pentium II systems for a fraction of the cost. Currently, Celeron 400 systems are duking it out with AMD's K6 for the low-end.
"We plan to be aggressive in areas of performance and pricing \[in the low-end\]," says Intel spokesperson Adam Grossberg.