All: Good write-up on MMX from Reuters,
Monday January 6 6:30 PM EST
Intel Corp sales seen swelling with MMX
By Barbara Grady
SAN FRANCISCO, Jan 6 (Reuter) - Intel Corp's new multimedia chip, which will hit the market Wednesday in retail personal computers, should dramatically boost Intel sales for 1997 and beyond, analysts said.
Analysts are predicting that Intel could sell 30 million to 45 million MMX chips this year - accounting for perhaps half of the microprocessor units it sells this year.
Intel plans to steadily increase production of the chip, whose product name is the P55C.
"We expect to see a healthy ramp in volume," Frank Spindler, marketing manager for the Pentium processor, said. "I think we will see strong demand immediately primarily in the premium price segment."
Analyst Drew Peck of Cowen & Co today raised his estimates of Intel's 1997 earnings by $0.90 a share to $7.80 and said about half of that increase is attributable to expected MMX demand.
"The impact of the MMX in the short term will be significant. Longer term the impact is far more subtle," Peck said, "By virtue of Intel introducing MMX, PC prices will fall, PC makers will sell more PCs and Intel more processors," Because the MMX allows the processor to perform the functions of a modem, for instance, or a graphics card, Peck believes the introduction of the MMX will force vendors of modems and graphic cards and other semiconductor-based multimedia solutions to slash prices to stay competitive.
This will lower prices on PCs overall which, in turn, will fuel demand for PCs.
Rob Chaplinsky of Hambrecht & Quist said the MMX will "create some buying spree in PCs in the first half of 1997." He estimated Intel will sell "in excess of 25 to 30 million" MMX chips this year and more next year.
Peck estimated that Intel will ship 45 million MMX chips, about half the 80 million or so microprocessors he expects it will ship this year.
Intel's development of the MMX is a clear demonstration of its growth strategy which is to grow by expanding the market for PCs with new uses.
Linley Gwennap, editor of the Microprocessor Report, said he expects the MMX technology to become a standard in the industry others will use, because it improves the quality of a host of applications that have failed to work well on the PC as well as improve those already in use, such as game playing.
The MMX chip could make PCs more usable for videoconferencing, for example, because it will handle video at 30 frames a second, about double what PCs with normal processors can handle, and do so with a regular phone line.
"The more uses a computer has, the more users will be attracted to it. MMX will provide a signficant boost to videoconferencing on PCs, for example," Spindler said. Other new uses MMX-PCs will enable are working with digital photography and games and TV-style video display.
Intel, hoping MMX will become an industry standard, has made the technology specifications available to microprocessor competitors Advanced Micro Devices Inc and Cyrix Corp.
Several analysts expect MMX to accelerate sales of notebook computers because it will allow notebooks to handle multimedia functions without bulking them up with added hardware.
Hitachi PC Corp 6980.T , among others, will announce an MMX-holding notebook Wednesday, its officials said.
Other companies expected to announce new PCs with MMX chips are International Business Machines Corp Compaq Computer Corp . |
