Intel's plan: Integrated motherboard deluge
Jennifer Hagendorf
Boston -- It is everything but the kitchen sink.
That is how VARs feel about Intel Corp.'s plan to further integrate ancillary technology into upcoming motherboards, said sources familiar with the chip maker's strategy.
The move makes it difficult for resellers to differentiate, VARs said. To add insult to injury, the news comes at a time when the channel is reporting shortages of 266MHz and 300MHz Pentium II processors, they said.
The Santa Clara, Calif.-based chip maker plans to integrate new technologies including Rambus In-line Memory Modules (RIMMs) and soft modems onto motherboards next year. Intel also will continue to add technology from other product groups including Accelerated Graphics Port (AGP), PCI audio and LAN-On-Motherboard (LOM), according to an Intel road map examined by CRN.
The technologies will be integrated on three new motherboards that support the Katmai processor-the next-generation Pentium II. Intel declined to comment on unannounced products.
Slated for release in the first half of 1999, the motherboards-code-named Fairbanks, Vancouver and Salem-are expected to integrate 4X AGP and PCI audio. Vancouver and Salem also will include integrated RIMMs and not offer an ISA bus. Fairbanks will include LOM.
Low-end boards, based on the Celeron chip, also are slated to feature varying levels of integration, sources said. Plans for one Celeron board, code-named Cayman, include an integrated soft modem, AGP and PCI audio, while the Augusta board will feature AGP, PCI audio and LOM. The boards are expected in the first half of 1999.
The addition of RIMMs and soft modems could limit VARs' flexibility in differentiating the systems they build as well as add cost, said sources and VARs.
"A large percentage of business customers don't want modems, so are we paying for something we don't need?" said Bob Gregory, president of Ocean State Computers Ltd., Providence, R.I.
Furthermore, other motherboard makers are skeptical about the performance gains of RIMMs over Dual In-line Memory Modules (DIMMs). "The question is how much [performance gain] is theoretical and how much is real," said one motherboard source.
Meanwhile, supplies of some of the most widely used Intel chips, including 266MHz and 300MHz Pentium II processors, remain scarce (CRN, Aug. 17).
Resellers building their own PCs said they are paying gray marketers more than $200 for 266MHz Pentium II processors list-priced at about $150 and more than $300 for 300MHz chips list-priced at slightly more than $200.
"For the first time in at least two years, the most commonly used processors in manufacturing are selling at above sticker price," said Beau Limbocker, CPU commodity manager at electronics wholesaler Real World Solutions, Andover, Mass.
"I believe Intel wants to push the Celeron 266MHz and 300MHz CPUs, and so is strategically holding back on the Pentium II," said a motherboard source. Intel today is expected to unveil the 333MHz Celeron with integrated Level 2 cache.
Rather than paying premium prices, some VARs are turning to competitors such as Advanced Micro Devices Inc.
"We made the decision last week to dump Intel for low-end machines," said Jason Simonds, president of Computer Connection, based in Rockland, Maine.
Despite Intel's assertion to the contrary, Simonds said the company is making "business less tasty for the little guy."
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