April 20, 1998, TechWeb News
UNDER $1,000: Segmenting Markets -- AMD, Cyrix Seek
To Divide, Then Conquer
By Jeff Bliss & Kimberly Caisse
New York -- Some people looking at the sub-$1,000 PC segment see a
monolithic market interested in only one thing-price. But Intel Corp.
competitors Advanced Micro Devices Inc. and Cyrix Corp. envision a
low-cost market with a variety of portable devices, Network Computers and
PCs.
The vendors plan to expand the sub-$1,000 corporate space by slicing it up.
"We see the market, as it matures, in segments. The sub-$1,000 desktop
category is a market unto itself. We're now seeing it [split]," said Stan
Swearingen, senior director of business management and marketing for
Richardson, Texas-based Cyrix.
Banking, retail, kiosks, education and Internet browsing are among the areas
on which the vendors will focus. And while sub-$1,000 PCs now make up
only 2 percent of the corporate market, that number will grow to 20 percent
by year's end, according to Technology Business Research Inc., a Hampton,
N.H.-based research firm.
But that popularity has created a shortage of chips the companies find
themselves struggling to alleviate. "It seems to me they need to get the
desktop thing straightened out before launching anything else," said Jack
Geraughty, an analyst with Credit Suisse First Boston Corp., a New York
investment banking firm.
The vendors remain undeterred, though. Resellers that deal with frugal chief
information officers are the target of the sub-$600 PCs due this summer.
Some of the systems, based on the MediaGX chip, will run Windows CE and
Windows 95, according to Cyrix. Initially, those PCs will incorporate
MediaGX 233MHz and 266MHz processors, but the company will unveil a
300MHz processor in the fall.
The OEMs will steal a concept from the PalmPilot by next January, when
they will include buttons that provide instant access to the Internet and
software applications, Geraughty said.
Cyrix also is marketing the MediaGX for the Windows-based terminals and
Network Computer markets. Network Computers running on the MediaGX
will come with Windows CE, but by adding a hard drive loaded with
Windows 95, the computer will become a full-blown PC, Swearingen said.
AMD will get into the act with the mforCE Demonstration System. The
product, with the ElanSC400 embedded chip, is available to hardware
developers for $750. The chip itself is $45 in 10,000-unit quantities.
"A 486 chip [from AMD] is a viable player in a battery-operated machine"
because power-management features are built in, said Dave Tobias, a
software developer at AMD. Twelve hours of battery life from a handheld
running the ElanSC400 is not inconceivable, he said.
Both makers want to shrink x86 processors to fit even smaller handheld
devices.
Copyright (c) 1998 CMP Media Inc. |
