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Chip May Lift AMD's Image

A $1,031 processor is part of a drive to stop being seen as a cheap alternative to Intel.

June 28, 2005|From Reuters

SAN FRANCISCO — Advanced Micro Devices Inc. on Monday unveiled its most expensive consumer processor, a $1,031 chip for video game enthusiasts that highlights AMD's new plan to market itself as a technology leader, not a cheap alternative to rival Intel Corp.

The chip, called the Athlon 64 FX-57, costs more than what many people pay for an entire personal computer. Gamers, looking for ever more detailed graphics and speed, tend to spend freely on the cutting-edge technology.

"These customers are our most loyal," said Jonathan Seckler, product manager for the Athlon 64 line. "They will pay the price of our best product, and we're raising our prices."

The chip also puts AMD, which has traditionally played the part of lower-price rival to Intel, in an unusual competitive position, because the chip is more expensive than Intel's $999 Extreme Edition gaming processor.

In this case, AMD decided to raise its highest price by $200, a strategy consistent with a plan by Chief Executive Hector Ruiz to shake off the company's legacy as a maker of cheap Intel clones.

The Athlon 64 chip will be sold in PCs made by several companies, including Alienware, a maker of high-priced PCs. Alienware calls the new AMD chip the "fastest gaming processor in the world" and will sell it as part of its $2,500 Aurora 7500 line.

Games -- with their intense requirements for three-dimensional graphics -- remain one of the last bastions of the consumer PC market in which speed is king. Nevertheless, sales of PC games are struggling. U.S. computer game sales fell $100 million last year to $1.1 billion, even as spending on games running on dedicated consoles such as Sony Corp.'s PlayStation or Microsoft Corp.'s Xbox rose by $400 million to $6.2 billion, the Entertainment Software Assn. said.

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