We have been on the topic of sub $1000 boxes and here is a company that
is making a chip for such a think. If the chip is as good as INTC's for
much less money, why are they not targeting INTC's market too?
Integrated Device unveils cheap clone of Intel's Pentium
Reuters Story - May 20, 1997 19:38
FINANCIAL US BUS DPR ELI IDTI INTC AMD CYRX DEC V%REUTER P%RTR
By Kourosh Karimkhany
PALO ALTO, Calif., May 20 (Reuter) - Integrated Device
Technology Inc. on Tuesday unveiled a chip that it
says works just like Intel Corp.'s Pentium
microprocessors, but at a fraction of the price.
Integrated Device, which until now has specialized in
making specialty memory chips, said it plans to go after the
potentially gigantic market for cheap personal computers that
sell for under $1,000.
Intel's chips are not cheap enough for that market, said
Glenn Henry, president of Centaur Technology Inc., the
Integrated Device unit that designed the chip.
"We're not taking on Intel," Henry said. "We're focusing on
a part of the marketplace that's under-served by the other
players."
The new IDT-C6 microprocessor is comparable to a
200-megahertz Pentium with MMX graphics capabilities from
Intel, Henry said. The chip will be sold for about $100, about
a quarter of what Intel currently charges for a 200-megahertz
Pentium. The first PCs to use the IDT-C6 will be on shelves in
September, he said.
Integrated Device joins a growing list of companies trying
to grab crumbs from Intel's plate. Even a tiny slice of Intel's
1996 revenue of $20.8 billion would mean several hundred
million dollars for companies like Integrated Device.
Advanced Micro Devices Inc. and Cyrix Corp.
are two companies that have had moderately
successfully businesses making chips that mimic Intel products.
A handful of other small companies are quietly developing
Intel-compatible chips, industry executives have said.
"There is room for competitors," said Mona Eraiba, senior
vice president at investment bank Gruntal & Co. "If all these
people get just the crumbs, they will still be pretty happy."
Intel also faces what could be a serious legal challenge
from Digital Equipment Corp. Digital last week sued
Intel, alleging that the chipmaker stole some of its
microprocessor design ideas from its Alpha microprocessors.
Henry said he believes that the microprocessor business is
just too profitable for one company to be able to defend.
Integrated Device will chase second-tier PC makers that
sell their machines in emerging markets, where the price of the
machine is the selling point, not performance, Henry said.
Intel spokesman Tom Waldrop said he cannot comment on the
new chip because he has not seen it. Even if the company does
manage to ship the chip on time in the third quarter, Intel's
products could catch in price, Waldrop said.
Integrated Device also does not have much of an advantage
in developing markets.
"We're finding that they tend to go for state of the art in
places like China, contrary to the common assumption," Waldrop
said.
Intel investors apparently were not concerned about
competition. Intel shares rose $6.125 to close at $161, its
all-time high.
Integrated Device shares, meanwhile, fell 12.5 cents to
$14. The stock has risen about $3 in the past three months,
however, partly because of anticipation of the new chip |
