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Intel Corp.’s share of the CPU market fell slightly during the third quarter as smaller rivals nipped at the leading chip maker’s heels.

Intel’s market share slipped to 81.9 percent, versus 82.5 percent a quarter before, according to data released Monday by Mercury Research Corp., of Cave Creek, Ariz. Rival Advanced Micro Devices Inc. saw its share increase by a smidgen, from 15.5 percent to 15.8 percent.

Speaking at the recent Gartner Symposium/ITxpo, Intel CEO Craig Barrett said computer users will accept less processing power in exchange for more features. Click here to read more.

Instead, the share shifts were a result of increased sales in the so-called “other” category, according to analyst Dean McCarron, who conducted the survey. This also-ran category is represented by Transmeta Corp. and Via Technologies Inc., that sell low-cost CPUs, primarily into the Asian region.

While AMD’s numbers increased compared to Intel’s, the company’s share is still down from its historical high point late last year. Currently, AMD is converting its manufacturing to a faster 90nm process, as well as shifting its lines to 64-bit products.

The real upside for AMD could be in the notebook market, McCarron said, where until now AMD has only been able to penetrate the “desktop-replacement” market. AMD began shipping its Athlon 64 processors for thin-and-light notebooks during the fourth quarter, and the company has also announced a 32-bit Sempron processor for the value notebook category, as well.

“Portables continue to be part of an expanding market,” McCarron said. “They are really the focus of growth for the market.”

However, McCarron declined to disclose the notebook market share held by both AMD and Intel, noting only that AMD had been doing “better” in the portable market.

The notebook market looks to moving briskly ahead, uninterrupted by component shortages, noted Chris Harrington, vice president of strategy and business development for Toshiba America Information Systems Inc., of Irvine, Calif., in an interview with

“We seem to be in pretty good shape,” he said.

At the same time, McCarron dismissed speculation that Intel’s recent track record of product cancellations might have affected its market share. The delay of the “Alviso” chipset and the issues associated with adding Wi-Fi to the “Grantsdale” chipset don’t play a role in CPU sales, he said.

McCarron also declined to confirm market share information attributed last week to Mercury regarding graphics-chip vendors ATI Technologies Inc. and Nvidia Corp. The figures, released by Goldman Sachs Global Investment Research analyst Andrew Root, among others, showed ATI’s market share increasing 4 percent for the quarter to 27 percent, while Nvidia’s share decreased 8 percent to 15 percent. Both trailed Intel, which now controls 39 percent of the graphics market through its integrated graphics chipsets.

Meanwhile, all Intel and other hardware vendors are gearing up for the holiday sales season, which officially begins at the end of November. The first weeks of the fourth quarter are usually spent stocking warehouse with new products, which will be sold during the start of the season.

“It’s pretty much business as usual,” McCarron said.

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