Here's an article touching on the integration issue. Personally I think it's typical extrapolative baloney.
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Market for New Class of Integrated Products Will Total $1.6 Billion in 2000, Force
Shakeout in Traditional PC Components Markets, According to New Report From
Mercury Research
SCOTTSDALE, Ariz. July 13 /PRNewswire/ -- The combined markets for traditional PC components like microprocessors,
graphics accelerators, system logic and sound chips peaked in 1997 and will decline in '98 and beyond, according to
Rearchitecting the PC, a new report released today by Mercury Research, Inc.
The shrinking market is due largely to the fact that the dramatic shift to lower-cost PCs is forcing average selling prices for
PC components dramatically lower. In 1998, component suppliers will ship $21.7 billion worth of processors, graphics
controllers, chip sets and sound chips to PC suppliers. That figure is 4 percent lower than '97 shipments of $22.6 billion,
according to data found in Rearchitecting the PC.
The lower prices and declining markets are spurring investment in a new class of more cost-effective, highly integrated PC
components -- a market that will grow to $1.6 billion in the year 2000, according to the report.
Unfortunately for existing suppliers, however, the additional revenue generated by the integrated components will not be
enough to reverse the decline in the market for traditional PC chips -- making a shakeout inevitable.
''The performance treadmill the component suppliers were on through much of the '90s is reaching a dead end,'' said Mike
Feibus, a principal analyst at Mercury Research. ''With the high end of the PC market shriveling, chip makers can no longer
profit by designing high-performance parts and riding them down the price curve.''
''Going forward, the survivors will offer low-cost, highly integrated PC components which enable computers that are both
attractive to buyers and profitable for suppliers,'' added Dean McCarron, also a principal analyst at Mercury Research.
''Now that the PC platform is stabilizing, integration is finally a viable avenue for achieving lower cost and higher
performance.''
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