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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: rudedog who wrote (91399)	5/31/2001 11:45:54 AM
From: Night Writer	Read Replies (2) \| Respond to of 97611

Rude, What do you think? NW New Intel Chip May Boost Competition to Compaq Computers May 31, 2001 (Houston Chronicle - Knight Ridder/Tribune Business News via COMTEX) -- A new microprocessor released by Intel this month eventually might mean more competition to Compaq Computer Corp.'s most powerful machines. The Itanium, a microprocessor with twice the data crunching power of Intel's current line of Pentium chips, is being rolled out in products by Dell Computer, IBM, Hewlett-Packard and even Compaq in the coming weeks. The new chip roughly matches the power and capabilities of Compaq's own Alpha chip, which is normally found in the largest research computers used by scientists and the military. Intel is licensing the Itanium to all comers, however, which opens the high-margin market of high-end servers to competitors that have traditionally lacked the technical expertise to build those powerful computers. "What this represents is an eventual leveling of the playing field and the first step in commoditizing the next level of servers," said Steve Kleynhans, an analyst with the META Group. "It's a slow process, not something that will happen in the next year, but it will happen eventually." The Itanium has been in development for nearly seven years at Intel as an eventual replacement for its current line of chips. Current Intel chips are based on what is known as 32-bit architecture, which means data is processed in 32-bit chunks. Itanium, Alpha and the Sparc chips developed by Sun Microsystems use 64-bit architecture, however, meaning those systems can process twice as much data. Alpha and Sparc chips have been used for years to run systems using Unix software, but the Itanium will be able to run Microsoft Windows, the operating system that started out as a consumer product and is now finding its way onto more and more business computers. Steve Cullen, director of semiconductor research with research firm Cahners Instat Group, said the movement of Microsoft and Intel into the world of powerful servers means prices on those products eventually will go the direction of desktop computer prices -- down. "The historical trend has been that things produced in high volume at the low end of the food chain eventually move up," Cullen said. "It's just a question of whether this will happen immediately or more gradually." The Itanium chap is particularly significant for Dell, which until now could not match the power of Compaq's Alpha machines. As Dell gained a greater share of the personal computer and corporate desktop computer business from Compaq in recent years, Compaq has relied increasingly on the sale of its more powerful computers. While Dell lacks Compaq's professional services organization to support such powerful machines, it can begin to chip away further at the server market that Compaq has dominated for so long. Dell began offering an Itanium-based Precision Workstation this week priced around $8,000 and expects to begin shipping a version of its PowerEdge server with the chip in mid-July. Pricing will start below $20,000 for entry-level systems, with a two-processor system running close to $30,000 and a system with four processors running between $60,000 and $70,000. Compaq has been developing its own Itanium systems for several years, however, and will begin shipping its Proliant server with four Itanium processors in the next 60 days, said Tim Golden, director of enterprise server marketing for Compaq. Golden admits Itanium will compete with the Alpha in some ways but said it's important for Compaq to offer both kinds of systems for customers. "Customers usually make a decision on hardware based on the software applications their they're using," Golden said. "Usually it's a software provider like Oracle that recommends to them the hardware that would work best for what they're doing. Whatever decision they make, we need to be able to support them in both." Prices for the Compaq systems have not been released. By Tom Fowler To see more of the Houston Chronicle, or to subscribe to the newspaper, go to h tp://www.chron.com (c) 2001, Houston Chronicle. Distributed by Knight Ridder/Tribune Business News