IDT has a lot of great products just entering the market and thats exciting. But that doesn't change the fact that they are late in the game with a 200 MHz Pentium MMX class part and a large part of the market is shifting toward higher speeds. That still leaves 100s of thousands of opportunities to sell C6s for upgrades and low end systems and a very significant opportunity to sell parts for laptops because of the low power consumption, and plug-in compatibility. IDTI is hardly about to make a dent in this Christmas' PC sales.
Cyrix/NSM has helped Compaq bust open interest for sub $1,000 PCs. The MediaGX integrates the graphics controller, the audio chip, and the system logic and bus interface onto a two-chip set. It uses an advanced DMA (Direct Memory Access) memory scheme to eliminate the need for SRAM cache memory as well. These things lower the cost of a PC system by about $75-90 by reducing motherboard complexity and components (graphics controller $30, system logic and SRAM $30, sound card $15). To use the parts it takes a custom motherboard. The current GX does not have MMX capability and is currently available up to 180 MHz speed grade but that will be remedied by the end of the year when 200 and 225 MHz MMX enhanced units are available. With the MediaGX going for around $100, you could say that once you spend the NRE for a custom motherboard or use a currently available off-the-shelf MB, the MPU is free. Despite having to fight their way out of a bad reputation for failing to live up to promises, Cyrix has been able to grow the market for the GX to over 400,000 parts last quarter. Thats about $40 million in business and is expected to grow to at least $60 million this quarter.
AMD, IDTI, and of course Cyrix have announced that they will all offer 3-D graphics capability in the next versions of their respective Pentium class chips next year. If IDT's road map is met, they will be right on tract or slightly ahead of the industry.
The current C6 is a great upgrade chip and the only low priced socket 7 Pentium class chip that is realy suited to laptop applications but it does not have the low-end market to itself and it will not be alone in the future. Still, the market opportunity is huge. Over 80 million PCs will be sold next year and millions of upgrades to the over 400 million exisiting PCs will be performed. With only high priced and limited supply of suitable Pentium class laptop parts, the C6 and C6+ should find plenty of socket to fill. It will take time to build production quantities, sales, and OEM confidence before success is reached. These won't happen overnight but "significant revenue" (over 10% of IDT's sales) are posible by the 1st qtr of '98. My guess is that in the current and expected market climate that by the end of '98, the C6 MPUs could account for as much as 30% of IDT's sales. I wouldn't put a degree of confidence on that guess at this point but I think it's posible. |
