Richard,
Intel recently admitted it was having problems with Merced. They may not even manufacture it, going with what was to be the next generation after Merced (I've forgotten the name)! Heat is indeed a problem with their chips, contributing to the delay in multiprocessor Xeon chip systems (past two). Alpha an PPC are way ahead in this area. In addition, die size contributes much to the cost of chip manufacture so IBM and MOT have a large profit margin advantage over Itel.
IBM uses PPC chips in their RS6000 (UNIX) servers and AS400 (proprietary) systems. AS400 systems are very successful in MidSized businesses (50Mill to a Billion in size?). RS6000 systems are way scalable and are used for supercomputing as well as servers for very large companies (such as Tower Records which moves gigantic amounts of data daily around the world). Although IBM may be making more on services, these services depend on the continued success of their systems to some extent. The PPC chips in these systems are more advanced than the chips in Apple desktop systems just as Xeons are more powerful than Pentium IIs.
Intel may be in a real pickle over the heat and size issues here, only time will tell though because they may have something up their sleave. If you combine this with Y2K issues and Justice Dept. issues Intel/Microsoft hegemony may become a thing of the past. Intel is also up against three other chip makers who have gained marketshare on the lower end. I may buy a PC to complement (3D apps) my Mac, and at this time I'd have no problem with a K6 chip. On the Mid/higher end systems PC geeks don't have a big problem with K6 chips which are less expensive. My brother bought a K6 system for his business, and it has no more problems than your average Wintel system. On the lower end, many consumers don't know the difference, and many oth those who do are losing their fear of alternatives to Intel. Celerons have gotten a nasty reputation, although Intel has corrected the flaw (no L2 cache) in older Celerons. So Intel has problems all over the place, not just Xeon. If it weren't for MicroSoft's dominance, Intel would be in terrible shape.
Of course this is what you are betting on when you buy stocks related to these companies. |
