Chicago (IL) – AMD has not yet found an effective way to slow its market share decline in the x86 CPU market. According to new market estimates, AMD currently has a 17.7% share, while Intel is at 81.2%.

The new data provided by Mercury Research to PC Magazine sounds somewhat surprising given AMD’s strategy to hold on to market share at virtually any cost and dirt cheap desktop processor prices. For example a triple core X3 8450 processor can be purchased for less than $100 these days, according to Pricegrabber.com and a quad-core X4 9550 CPU for $144.

We recently reported about what appears to be evolving into yet another price war between Intel and AMD especially in the sub-$200 segment, in which AMD seems to have some compelling offers. However, according to the PC Magazine article, AMD’s problem isn’t really the desktop market, it is the notebook in which AMD just does not have Intel’s depth these days and can’t quite keep up in a segment that is growing, while the desktop market is declining.

According to Mercury Research, the processor grew by 13.3% in Q3, driven by mobile CPU sales that gained about 27%.

"AMD's share decline was essentially due to their comparatively weaker mobile mix - the market moved strongly to mobile, and Intel having a larger share and mix benefited more, diluting AMD's position," Mercury Research analyst Dean McCarron told PC Magazine. The translation: AMD needs a much stronger mobile product line to stop the bleeding.

Market share numbers have to be taken with a grain a salt and have to be put into perspective, as they can vary greatly from one market research firm to another. However, Mercury Research says that AMD still held a share of 25.3% in Q4 of 2006, the first quarter in which it felt the full brunt of Intel’s Core 2 Duo processor.

If these numbers in fact are correct, then it is clear that AMD will need to roll out a mobile Fusion processor rather sooner than later to improve its competitiveness.