Compaq was very successful with their presario 2XXX product line that has used the Cyrix MediaGX chip up to now. They first went to Intel about 2 years ago and told them they wanted to attack the sub $1200 market that Packard Bell was the volume leader in. Intel said that they weren't interest in an puny 7% of the market (at the time). So Compaq worked with Cyrix and FIC which makes the Presario 2200s under contract out of a Texas facility. Intel has vowed to come out with several lower priced Pentium II chips that would compete with lower Priced Cyrix and AMD parts. As has been discussed months back on this board, the MediaGX chip set incorporates basic 2D graphics, audio, system I/O, memory management and system logic. That reduces total parts and subsystem complexity quite a bit and lowers overall cost.
Compaq has sold about twice the number of Presarios as they anticipated, at ccertain times outstripping their ability to produce them or to get parts from Cyrix. That is quite an accomplishment and flies in the face of the street (and lavishly high paid analyst) wisdom prevalent at the time that unless a box has Intel stamped all over it, that it won't sell in quantity. The America cattle lot consumer mentality is bred on brand recognition and it doesn't appear to matter if it is brand loyalty to the Intel Inside mantra or that owed to the well deserved loyalty of Compaq adherents.
What is apparent is that the market is fragmenting and being driven toward lower price points. This should have been obvious even to the half brained among the analysts (there are some very good analysts and some dangerously less brilliant ones). As the X86 chips have evolved to the point of limited returns due largely to I/O and memory bandwidth contraints and a maturing of software platforms, the incremental capability of uPs does not enable much. More is being enabled by better graphics, higher drive capacities, larger standard memory capacity, and higher bandwidth communications.
What this means to IDTI is that the market will be highly competitive but that Henry's design philisophy is clearly being proven to be one of the most prophetic of all the competitors because it is targeted toward lower cost, lower system demands, and satisfactory performance.
Expect to see a lot more competition, and lower and lower prices as the PC evolves into broader market appeal and diversification. In 18 months 300 MHz parts will probably be selling for well under $100 and 225-233 MHz parts will be around $50. in addition, PC systems will become simplified with less reliance on clunky board edge connectors and almost univeral use of USB and high-speed IEEXXX (firewire) interfaces.
The PC market as we have known it is changning to become much more intra/internet centric. A host of devices will emerge to take advantage of the new consumer and business needs for communications devices and a lot of these will require low cost X86 compatible parts like the C6 family. If, that is, IDT can make enough of them to matter - something that is not yet clear. If IDTI can't produce parts in the needed qty, why not IBM, TI, Fujitsu, or one of the propped up Korean cos? |
