OT
MUNICH, Dec 3 (Reuters) - Intel Corp <INTC.O>. 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 <CYRX.O>
and Advanced Micro Devices Inc <AMD.N>. 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 <CPQ.N> 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.
((Neal Boudette, Frankfurt Newsroom, +49 69 756525
frankfurt.newsroom@reuters.com))
REUTERS
|
