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Mary Cluney
INTERVIEW-Intel sees Celeron gaining share
Reuters Story - April 27, 1998 18:23
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By Neal Boudette
FRANKFURT, April 27 (Reuters) - Intel Corp said on
Monday its new Celeron line of computer chips for low-cost PCs
was gaining market share and would turn a profit.
"Early sales are robust. We have essentially every PC
manufacturer as a Celeron customer and they have all announced
plans to deliver this product," Pat Gelsinger, general manager
of Intel's Business Platform Group, told Reuters in an
interview.
"We are gaining market share," he said, although he declined
to give specific market share figures for sales of PCs priced
less than $1,200 per unit.
Introduced earlier this month, the 266 megahertz Celeron was
developed to enable Intel to strike back at competitors in the
fast-growing "basic PC" segment.
The product announcement came as Intel said first-quarter
net income fell 11 percent to $1.7 billion. First-quarter sales
declined seven percent to $6 billion. The fall was partly due to
increased competition which has forced down chip prices.
The Celeron chip has a list price of $155 in quantities of
1,000, while a faster 300 megahertz chip from National
Semiconductor Corp sells for $180. Advanced Micro
Devices Inc also offers a 300 megahertz K6 chip which is
cheaper than comparable Intel chips.
Gelsinger insisted that Intel was making a profit on the
chips, although he admitted the margin was relatively low
compared to Intel's other microprocessors.
"The margins are lower than our high-end products," he said.
"We were behind and because we were behind we haven't done as
good a job in designing this first (Celeron) product."
Computer magazines have criticised the Celeron chip, saying
it is slower than competing chips. It does not have a level-two
cache, a small amount of memory where the processor can store
data temporarily, although a 300 megahertz version due later
this fall will have an "L2" cache, Gelsinger said.
He said Intel expected a rebound in growth of chips for
"performance PCs" used by corporations.
A slowdown in the performance PC segment "led to a less than
desirable first quarter," he said. "But now we see sales
growing" in both unit and dollar terms.
Intel recently added 400 and 350 megahertz versions of its
Pentium II chips for performance desktop PCs, although its top
sellers in this area are the 266 and 300 megahertz versions.
According to market researchers, Intel has a 90 per cent
share of the performance PC market. The company believes it is
heading towards a similar hold on the market for chips for the
fastest PCs -- servers that distribute data to networks and
workstations used by scientists and engineers.
It has 60 to 70 percent share in servers and workstations,
Gelsinger said. "We see that going to more than 80 percent,
almost 90 percent, in five years."
Sales of Intel's fastest chips for servers and workstations
are growing well above the market rate of 30 percent a year,
while competing server and workstation chips based on so-called
RISC technology are level, he said. |
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