For example, AMD's 3.2-GHz dual-core Phenom II X2 555 Black Edition processor, which is priced at $99, is intended to appeal to consumers looking to adopt Windows 7. And the new quad-core Athlon II X4 635 processor, priced at $119, targets multitasking users.

Desktops Still Significant

AMD's decision to continue to drive down pricing on chips for desktop PCs is significant, given that notebooks and netbooks currently dominate global PC sales. Matthew Wilkins, a principal analyst at iSuppli, said the desktop PC remains an important market segment for AMD and other processor makers.

"Despite the growth in the notebook segment, the desktop market is still a very significant business opportunity," with sales of about "130 million units shipped worldwide in 2009," Wilkins said.

AMD Senior Manager Simon Solotko said he expects we will continue to see innovation in fixed-location PCs, particularly in the integration of computing and entertainment experiences within the home. "We are at the dawn of digital entertainment; there are still huge problems in storing, processing and distributing entertainment and information that a desktop PC can help solve," Solotko explained.

AMD's Phenom II X2 is its fastest dual-core desktop processor to date, but clock speed today "is just one metric of processor performance, whereas it used to be 'the' metric," Wilkins noted. "Multi-core processor designs and cache memory are other key metrics for processor performance."

Solotko believes the combination of CPU and GPU capabilities is going to solve the greatest challenges, which include delivering and processing HD content and demanding tasks like Flash playback and video transcode. "These innovations will bring more benefit than raw clock speed," Solotko said. "However, the AMD Phenom II X2 555 Black Edition processor is an affordable dual-core hot rod that includes the ability to tune processor performance for massive performance headroom." (continued...)

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