news.cnet.com
Intel's latest Xeon chips getting cool reception
By Michael Kanellos
Staff Writer, CNET News.com
November 23, 1999, 12:40 p.m. PT
update While PC makers just can't get enough of Intel's latest Pentium III processors, they're
rejecting Intel's more expensive Xeon chips.
Hewlett-Packard is dropping the Xeon--a more expensive derivative of the Pentium III--from its workstation
product lines because of tepid demand, while Dell will not be adopting the newest members of the chip
family for its workstations, executives at the companies said.
The cold shoulder for Xeon largely comes as a result of overlap in the Intel product line. Xeons cost more
than standard Pentium IIIs but do not provide much advantage, executives and analysts said.
"People aren't necessarily following Intel's guidelines," said Shawn Willett, an analyst at The Aberdeen
Group. "The chips that are supposed to have lower performance are performing at or close to the level of the
higher [end] ones."
Although the volumes of Xeon workstation chips remains small, indifference to the product line will likely have
at least some impact on Intel's bottom line. Xeon chips cost between $50 to several hundred more than
Pentium IIIs and, generally, are more profitable than Pentium IIIs. The higher profit on these chips has partially
been used to offset lower margins on the Celeron chip line. Xeons mostly get used in server computers.
HP had been using the chips in both its high-performance Vizualize workstations and its Kayak line. Instead,
HP will depend on Pentium IIIs or its own PA-RISC processors.
"For a workstation application, there really is no performance difference between
a Pentium III and a Pentium III Xeon," said Dave Morse, business manager for
HP's Vizualize workstations.
Similarly, Dell Computer, which historically has adopted most Intel
microprocessors, will not be incorporating recently released 733-MHz, 667-MHz
and 600-MHz Xeon Pentium IIIs into its workstation line, a Dell spokesperson
said.
Intel could not be reached for comment on this story. Nonetheless, company
executives have often touted the success of PC manufacturers using its chips.
"All of the growth in workstations going forward for the next three years is based
around the Intel architecture," Paul Otellini, general manager of the Intel
architecture business group, said recently.
Improvements will come, but they likely won't convince everyone. Dell
representatives indicated that the company would adopt enhanced versions of
Xeon coming in 2000, but HP probably won't. In the past, when Xeons
outperformed Pentiums, demand was still low, said Morse.
"The Xeons basically are all Pentium IIIs," said Dean McCarron, principal at
Mercury Research, who added that Intel has probably not had the success it had
hoped for with the product line.
"The market is very small" for Xeon workstations, added Achim Kuttler, marketing manager for HP's
business desktops in North America.
The Xeon line, introduced last year, was touted as a high-performance version of the Pentium III for
workstations and servers. Although based around the same processor core as desktop Pentium IIIs, the
original Pentium III Xeons contained a faster secondary cache, a store of memory located near the
processor for rapid data access. The faster cache boosted performance.
Xeons also came with caches ranging in size from 512KB, the same as standard Pentium IIIs, to 1MB and
2MB. Furthermore, Pentium III Xeons could be used in two-, four- and eventually eight-processor systems.
The performance edge continued for Xeon in the first generation of Pentium III processors.
Along with greater performance, the chips commanded much higher prices. Xeons generally started at $931
and sold for as much as $3,692 for the versions with 2MB of cache. Standard Pentium IIIs typically
premiered at under $800.
The performance equation however disappeared with the new line of "Coppermine" Pentium IIIs and Xeons
that debuted in October. Coppermines differ from standard Pentium IIIs in that the secondary cache is
integrated into the same piece of silicon as the processor. Although smaller, the integrated cache is much
more powerful.
In fact, the improvement that comes from integration means that there is very little difference between the
high-end Pentium III processor for desktops and the new version of Xeon based around the Coppermine
design.
The difference mainly lies in price. The Xeons cost $50 more than Pentium IIIs running at the same speed. A
733-MHz Coppermine Xeon, for example, sells for $826 in volume. A standard 733-MHz Pentium III sells for
$776. Several manufacturers are also using a chipset that allows them to build multiprocessor systems with
ordinary Pentium IIIs.
Next year, the company will release Xeons with integrated 1MB and 2MB secondary caches, several
sources said, which will again create a performance gap. Dell at that time will adopt higher performing
Xeons, the Dell spokesperson said.
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