All: Article on Intel/Munich Press Conference:
Wednesday December 3, 3:35 pm Eastern Time
Intel plans broad range of chips for 1998
MUNICH, Dec 3 (Reuters) - Intel Corp (Nasdaq:INTC - news). said on Wednesday it planned to unleash a broad array of
Pentium II computer chips in 1998 in an effort to maintain its dominant position while expanding into new market segments.
Intel planned to pair the heart of its high-performance Pentium II chip with a variety of other technologies to produce
processors tailored for PCs ranging from low-cost home computers to mainframe-class machines, the company said at a news
conference.
The product strategy mirrors a reorganisation that created new divisions to focus on emerging segments in the computer
industry, said Joachim Rissmann, Intel managing director for Central Europe.
''We believe this segmentation will accelerate and we want to make sure that we continue to grow and that we don't give away
any business,'' he told Reuters.
In 1998, Intel planned to offer versions of Pentium II chips for inexpensive consumer and business desktop PCs, multimedia
machines, portable PCs, engineering workstations and a range of servers for controlling networks, hosting Internet sites and
running corporate date systems, he said.
The strategy marks a critical shift for Intel, which in the past has introduced high-speed chips and then lowered prices to reach
different market segments.
Intel's share price has been pressured recently as financial analysts raised concerns that competitors Cyrix Corp
(Nasdaq:CYRX - news) and Advanced Micro Devices Inc (NYSE:AMD - news). were forcing the chip giant to lower prices
and accept leaner margins.
Cyrix has won sales by offering a specialised chip that Compaq Computer Corp (NYSE:CPQ - news) uses in home PCs
priced under $1,000, while AMD has been aggressive in tailoring its K6 chip for mobile computers.
''The market is segmenting and we are going to address those segments,'' Rissmann said.
For standard desktop computers, Intel would offer a 333MHz Pentium II chip in the first quarter of 1998, and follow up with
others at 350, 400 and 450MHz, he said.
It would also offer technology that increases the speeds at which PCs can move data from memory to the processor and
accelerates processing of images or video.
For home PCs, there would be Pentium II chips that run up to 300MHz and have slower system and graphics systems.
Rissmann said these Pentium II chips would have the power to emulate a modem -- giving users the ability to connect the
Internet while keeping the cost of the machine to around $1,000.
Compaq's Cyrix-based home PCs do not have modems.
In the server segment, Intel planned to release chips running up to 450MHz along with technology allowing eight Pentium II
processors to work in tandem and an expanded cache, or memory built into the processor, a feature that boosts processing
performance.
New Pentium II chips for portable computers would move up to 266 and 300MHz, Rissmann said. Intel would also lower their
power consumption to 1.7 volts to increase battery life.
Intel expected Pentium II chips to make up about half of its shipments by the middle of 1998, and 90 percent by the end of
next year. They make up about 25 percent of shipments now.
Standard Pentium chips comprise about 70 percent of today's production, and were expected to be virtually phased out in the
third quarter of 1998, Rissmann said.
Financial analysts have also raised concerns that Intel was cutting prices to speed acceptance of Pentium II chips. It cut prices
up to 40 percent last month after similar cuts in August.
Rissmann said the transition to Pentium II was going as fast as expected. ''The price cuts were supported by reductions in
production cots,'' he said. |
