By Michael Kanellos
Tuesday, July 11 2006 11:30 AM
URL: http://www.zdnetasia.com/news/hardware/0,39042972,39374112,00.htm

Intel is back on top in retail in the United States, and it can thank Toshiba.

The Santa Clara, Calif.-based chip giant saw its share of computer processors sold in retail outlets in the United States rise from 42.2 percent in May to 51.2 percent in June, according to Current Analysis. Meanwhile, the percentage of PCs running processors from Advanced Micro Devices declined from 57.4 percent in May to 48.5 percent in June.

The shift came because of an emphasis on inexpensive notebooks containing Celeron M chips, according to Sam Bhavnani, director of research at Current Analysis. In notebooks, Intel expanded its market share from 57.3 percent in May to 66.2 percent in June. AMD's notebook share dropped from 42.3 percent in May to 33.4 percent in June.

A lot of those Celeron notebooks were Toshiba models selling for US$599 and less, Bhavnani said.

"They are challenging HP-Compaq," he said, referring to a Hewlett-Packard division. "Where Intel really came back strong is notebooks."

AMD still holds the lion's share of the desktop market. AMD accounted for 73 percent of all retail desktops in the United States, while Intel accounted for only 26.8 percent. But it's a mixed blessing, Bhavnani noted. AMD in May was dominant in the machines that cost US$750. The chipmaker accounted for 84.5 percent of desktops costing up to US$500 and 88.9 percent of desktops priced between US$500 and US$750.

By contrast, Intel accounted for 52.1 percent of desktops costing US$750 to US$999 and a whopping 91.7 percent of those starting at US$1,250 that month. The fancy Viiv computers, geared for home entertainment, have done well, going from a nonexistent product category at the start of the year to 10 percent of the U.S. retail desktop market. Intel CEO Paul Otellini has said the goal is to sell more Viivs this year than it sold Centrino notebooks in 2003, the first year those came out.

"Above US$750, Intel really controls things," Bhavnani said. "It's been the story for the last four years."

Intel steadily lost market in 2005 and continued to lose ground in 2006. But since the first part of the year, Intel executives have said the company would become more aggressive due to manufacturing advances and new chips.

Price cuts have also dented AMD. A similar reversal occurred in 2001.