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Politics : Formerly About Advanced Micro Devices

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To: Robert Walter who wrote (5507)	2/14/1997 6:03:00 PM
From: Joe Fang	of 1572107

Robert <<<I'm pulling for 3Com, Cisco and Bay to kick their butt out of NIC's>>> If I may...this is exactly what Intel wants. Intel doesn't want to be take away the networker's business...all that it cares about is that all related peripherals are up to par with its processors so that there will always be demand for faster processors due to newer, more complex applications like video telephony, 3D MM, virtual reality, etc, etc,.. When Intel was making modems...all the other modem makers woke up and started producing faster and faster modems (wow 56 kbps now !!). While you can say that Intel got its butt kicked but that was what they wanted...to stir up the competition to make better modems to complement its processors. I mean...what good is having a Pentium if your modem is only 9600 Kbps...what good is having the ability to multi-task at great speeds when the data being downloaded is slow ? Today...many of us believe that one of the major driving forces to consume faster CPU's is the intranet. Intel is pushing people to upgrade to fast ethernet (100 Mbps) adaptors at the desktop level and to implement gigabit ethernet switches in the LAN backbone. By increasing the speed of the corporate intranet at a lower price, Intel has a more compelling story to drive the demand for faster processors. So by dropping prices on NIC's not only is Intel lowering the cost of a complementary good (this is good old Cross Price Elasticity here) but at the same time serving as a wake up call to push the network industry working in the LAN area to the next generation. Once this happens...I bet Intel will back off and find some other areas to push. It has always been known that "need" drives "technology". But Intel is trying to create the "need" so that we will continue to buy its technology. I mean whether you like Intel or not...you must have some respect for Dr. Grove for what he has done for the entire computer/info tech. industry. Everybody benefits. Motherboard was another area that Intel pushed. If Intel did not impose the PCI standard...maybe we'll be stuck with VLB buses. But when PCI became a standard...it backed off. Intel is working with Rambus and now with Samsung to push the next generation of ram to complement the P7 (Merced) processor. Again...the same reasoning applys here...what good is having a 500 mhz 64 bit processor when your ram can't keep up with it ? For the sake of the entire computer industry...it is important that Intel's strategy to induce the need for faster processors be successful...other wise everyone suffers...including AMD and Cyrix. Joe

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