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As Intel Corp. is driving more and more Core 2 micro-architecture based products into the market, its market positions are improving, just as those of Dell and Nvidia Corp. Meanwhile, Advanced Micro Devices and ATI Technologies start to lose ground in the workstation market, as both have delayed introduction of higher performance chips.

Intel Found in 92% of Workstations

“With the release of a much more competitive dual-socket platform in the second quarter, Xeon's share immediately began to improve,” said Alex Herrera, JPR senior analyst.

Intel processors were found in 92% of workstation systems, whereas AMD and legacy RISC/Unix platforms commanded the remaining 8% of the market in terms of units. Back in Q3 2005 Advanced Micro Devices commanded 2% of the workstation microprocessor market, while Intel’s share was 93%; in Q4 2005 the company’s share increased to 2.6%. JPR did not release the exact market share percentage that AMD commands now [in the third quarter of 2006], however, executives of the company said in the most recent conference call with analysts that the company had seen shipments growth in all its segments, including workstation products.

Nvidia Commands Professional Market with 77.8% Share

Graphics accelerator suppliers, such as ATI Technologies and Nvidia Corp., shipped rather unprecedented number of graphics boards during the third quarter – about 869 thousand (869 100 to be exact) of units – for total revenue of $284.1 million and posted 37% unit growth and 15.4% revenue growth year-over-year.

ATI’s market share of workstation graphics hardware declined in the third quarter to 19.1%, down from 24.4% in the previous quarter, while Nvidia retained dominance in the market with 77.8% share.

JPR notes that even though sees the risk that AMD ownership will negatively impact ATI’s share in the Intel-dominated workstation space, the third quarter results showcase that ATI did not have the right products to win contracts with computer makers back in Q2 2006, when the deal between AMD and ATI was not announced, which means that as time goes by, ATI’s market share may slip further.

“A quarter’s results are usually indicative of factors like OEM decisions and orders made the quarter preceding, and acquisition plans weren’t made public until Q3 was already underway. Results from Q4 2006 and beyond will be better indicators of the AMD effect on sales of ATI professional graphics,” said Alex Herrera.

Market Up 17%, Dell Leads the Pack

Overall, the workstation market showed continued strength, with vendors shipping roughly 623 000 workstations, accounting for about $1.5 billion in revenue, according to market research firm Jon Peddie Research (JPR). In the Q3 various computers makers shipped 17% more machines compared to the same period a year ago and managed to increase their workstation revenues by 10.5% annually.

Dell held on to its top position as workstation vendor, with a 41% market share in terms of units.


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