AMD has admitted that it has suffered badly in terms of market share during the first part of the year. The frank admission came during a press event in Tunisia. Top AMD sales bod John Byrne told the assembled press that the company had had its "arse kicked".

AMD has performed particularly badly over recent months, losing gains in market share it had made the previous quarter. Byrne claims the company's aim is now to "win the market back".

The company used the briefing to outline a new strategy aimed at cutting Intel 's lead. In the short term we'll see more aggressive pricing - even though Byrne said 30 per cent of the company's product is already sold at a price point of less than $49.

Longer term, the company will bundle together AMD processors and graphics chips. It'll seek to combat Intel by bringing out better performing quad-core chips. At a recent London briefing AMD claimed the new K10 Barcelona processor will beat the competition in "all aspects".

Market share

At the time, Guiseppe Amato, technical director at AMD Europe added that the new Barcelona architecture will be migrated to both desktop and mobile platforms, commenting it "must be faster". It's by speeding up the time it takes new chips to market that AMD will hope to regain market share.

Some of AMD's changes will be internal. The company is aiming to cut the dead wood left over from its acquisition of ATI and is working on amalgamating sales and marketing teams.

AMD admits that its focus on attracting and supplying manufacturers like Dell has cost its traditional relationships in selling to stores.

We reported on Friday how AMD announced losses of $611 million for the first quarter. Wall Street analysts had predicted that AMD would get bad news - but not quite that bad. AMD had previously announced several profit warnings.

Intel outlined how it plans to prevent the ongoing threat of AMD at the spring Intel Developer Forum ( IDF ).