Sun Microsystems (NASDAQ: SUNW) announced that it will begin using Intel Inc.'s (NASDAQ: INTC) processors in its servers today, however Intel rival AMD (NYSE: AMD) Corp. may feel little pressure from the move.
Sun said that it has inked a deal with Intel to use its Xeon class processors in its upcoming servers, ending a once exclusive relationship with AMD. One analyst says that while the move increases competition between the two processor companies, any pressure may not be as nearly as much some may think.
The actual impact on AMD is not as great as people might imagine, said Dean McCarron, principal analyst with Mercury Research.
McCarron explained that the server market is only about 5 percent of the overall computer market, and if AMD loses business, that would play a minor role.
They [Sun] had been a large customer [of AMD] at one time, McCarron said, but HP and Dell have since joined in. They risk losing some portion of their business, but it is one of several.
Shares of AMD fell 1.18 percent, or 21 cents to close at $17.52 on the New York Stock Exchange.
Intel also fell slightly, losing 0.05 percent, or 1 cent to close at $20.81 on the Nasdaq Stock Market, while Sun also lost 0.52 percent, or 3 cents to $5.74.