e market share away from Intel. Therefore, Intel needs to maintain market dominance by continuing to make a high quality microprocessor with process technology improvements. These factors will help Intel stay ahead of their competitors.Advanced Micro Devices (AMD) had carved out a niche providing less expensive microprocessors than Intel's mainstream offerings. AMD, confident that NexGen had strong technology despite its low sales, promptly scrapped its own design for a chip to compete with Intel's Pentium Pro in favor of a design (subsequently named K6) that NexGen had under development. Whereas previous generations of AMD chips had been clones of Intel's designs, AMD and NexGen engineers had designed the K5 and K6 from scratch. AMD hoped that its K6 chip would be an attractive alternative to Intel's higher-priced Pentium Pro chip. AMD was planning to introduce 180, 200and 233 MHz versions of its K6 chip during 1997 and a 300 MHz version was the plans for 1998. AMD expected that 5 of the top 10 PC manufacturers would be using the K6 in some of their models during 1997; analysts projected that AMD could sell up to 5 million K6 chips in 1997. The K6 was expected to sell for about 25% less than Intel's Pentium Pro chips. IBM and Compaq announced in 1997 that they would use AMD's K6 processors in their low-end machines. During the first three weeks of September, nearly half of all the desktop computers sold through retailers used the AMD K6 microprocessor, according to market researcher PC Data Inc. That is a dramatic improvement from last year when 92% of those same machines had Intel chips inside. Today, only 43% of retail PCs sold use Intel. Industry analysts expected Cyrix to be more successful in marketing its M2 against Intel's MMX Pentium in the price-sensitive home computer and notebook segments. The stigma of a non-Intel chip posed a high barrier for Cyrix to hurdle in, penetrating the high-end desktop and notebook s...
