Intel Investors - A Good article on Intel and Other MotherBoard manufacturers' business.
Intel leads in revenue - but at a decreasing level.
Paul
{============================}
crn.com
Intel yields share to its competitive partners
CONTENTS
By Amber Howle & Marcia Savage
While Intel Corp. still dominated the motherboard business in 1998, the chip giant also yielded market share to a host of Taiwan-based vendors.
Analysts cited the absence of a major processor upgrade cycle, the Asian currency crisis and the proliferation of processors as critical factors that led Intel to reduce its emphasis on motherboard sales.
'We continue to grow in terms of unit volume, but not necessarily in revenue.' -- B.C. Ooi, Intel
"Given the broad product line that Intel has from Celeron to Xeon processors, Intel can't support the industry alone," said Kelly Spang, an analyst for Technology Business Research, Hampton, N.H. "There are too many products they would need to support."
While Intel, Santa Clara, Calif., does not disclose motherboard revenue, TBR estimated Intel's worldwide motherboard sales shrank 20 percent last year to $2.4 billion.
Spang said Intel appeared to be putting less emphasis on motherboards. "By partnering with third-party manufacturers, it increases the penetration that new Intel processors could have . . . because there would be multiple sources for the motherboards," she said.
Scott Hudson, senior analyst for Cahners In-Stat Group, San Jose, Calif., agreed, saying Intel primarily uses motherboards to advance its chip technology. In years when it does not introduce a next-generation microprocessor, the company has no need to focus on motherboards, he said.
Intel officials painted a different picture. Unit sales of Intel motherboards did in fact grow at a healthy pace last year, said B.C. Ooi, vice president of Intel's desktop products group and co-general manager of the OEM platform solutions division, Hillsboro, Ore.
"We continued to grow in terms of unit volume, but not necessarily in revenue because of the pressure of pricing," he said.
Motherboard manufacturers grappled with a downward spiral of component costs and the complicated process of integrating audio and graphics products on the motherboard, Ooi said.
Many of Intel's Asian competitors, however, were able to substantially increase revenue last year.
Four of the top 10 manufacturers on the Market Leaders list showed revenue gains in excess of 40 percent last year. The currency crisis in Asia made their products more price-competitive at the same time that Intel did not have new microprocessor technology in the market, Hudson said. The Taiwanese companies also proved adept at cutting costs, he said.
AsusTek Computers Inc., Taipei, chalked up a 43 percent increase in motherboard revenue to $1 billion last year, bumping AOpen Inc. out of the No. 2 spot.
New Socket 7 and Intel BX chipset motherboards were key factors in AsusTek's growth, said Raymond Chen, vice president of AsusTek. "These two products are giving us the volume," he said.
Chen said the company responded to declining prices by providing customers with more technical support.
The next three leaders, also based in Taipei, maintained their revenue but failed to capitalize on growth opportunities. AOpen, No. 3 with $870 million in sales, and First International Computer Inc., No. 4 with $600-million, saw modest gains. Elitegroup Computer Systems Inc., which tied with FIC for No. 4, had flat sales.
AOpen's relationships with resellers and its focus on components helped it maintain its market position, said Paul Su, company president. "Most AOpen [reseller] programs come with any AOpen component, including motherboards," Su said.
Meanwhile, smaller, Taipei-based competitors farther down the list were able to seize opportunities in a difficult market. Gigabyte Technology Co. Ltd., No. 6, boosted revenue 58 percent to $348 million. Micro Star International Co. Ltd., No. 7, saw revenue soar 52 percent to $298 million. And DFI Inc., No. 9, reported the largest gain--a 60 percent increase to $256 million.
For the complete Market Leaders lists of the top peripherals and components vendors |
