Hit the Road, Jack: Mobility Manipulating Technology Market

Dennis Faas's picture

With the popularity of WiFi, cell phones, the Blackberry, and laptops booming, the tech industry is being forced to come to grips with a world constantly "on the go."

Desktop PCs are increasingly becoming immense paper weights for many consumers, and second quarter market research shows that this is having a drastic impact on many traditionally powerful tech manufacturers.

From the beginning of 2006 until the recent end of the second quarter, the average AMD Athlon 64 desktop PC price sunk from $608 USD to $526 USD.

The result is great for the spread of budget-priced systems to homes and other facilities (such as schools and small businesses) that may not, at previous points in time, have been able to afford computer access.

However, for the major manufacturers who depend on desktop sales, such as AMD, the results are proving devastating. (Source: zdnet.com)

Although AMD expects to post $1.2 billion in revenue for the second quarter, the net result is down 9% from the previous period. The cause of such a massive drop is two-fold: Intel price cuts and a generally slow second quarter. With Intel slicing the costs of its own products, demand for AMD has waned.

So, how can Intel still remain "peachy keen"?

Intel is keeping its head above water because it has a greater leverage over vendors than AMD.

Essentially, vendors prefer to use AMD chips in their higher-performance but lower-selling systems, leaving Intel to dominate the mainstream bulk of the market.

Quite simply, AMD has little control over this decision, and the result lands them with losses, like those showcased in this year's second quarter. (Source: betanews.com)

With the world increasingly demanding tech products that allow them to work on the road, industry giants are scrambling to accommodate the today's caffeine-driven consumer. For now, the net result is great for the spread of home systems to homes, offices, and public services on a budget, but could change if those traditional suppliers stumble.

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