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To: g_m10 who wrote (8807)	11/11/1997 8:55:00 PM
From: Kai-Uwe	Respond to of 97611

Heard exactly that - this might be the reason for intel's aggressive push towards PII. An interesting article below: Intel Addresses Sub-$1,000 PC Segment (11/11/97; 9:00 a.m. EST) By Kelly Spang, Computer Reseller News Intel attempted to allay Wall Street concerns about the company's sub-$1,000 PC plans and sluggish sales in the Asian market at its annual analyst meeting. With the increased market focus on the sub-$1,000 PC, a concern among financial analysts was how Intel intended to address this market segment going forward, particularly given the low margins. As a result, Intel outlined its plans for a stripped-down version of its Pentium II to fill the bill of the "basic PC" market. These plans include a 266-MHz Pentium II without Level 2 cache, as well as integrated cache on the same chip as the CPU core, up to a capacity of 256 kilobytes. In addition, Intel is looking into integrating graphics and memory controller functionality, and into providing resellers "maximum price performance characteristics" for this market. "In addition to the low end, Intel is also moving into the high end of the [server] market, which traditionally has been addressed by RISC-based workstation vendors. That's a market that has above-average margins and may help offload some of the pressures at the low end," said Dave Powers, senior technology analyst for Edward Jones, a financial analyst based in St. Louis. By the end of 1998, Intel officials expect the transition will be complete to Pentium II, with different product families designed to address each market segment, ranging from entry-level PCs to high-end servers, as well as mobile computers. "Intel shareholders will be able to sleep a little easier after this meeting," said Powers. At the high-performance desktop, Intel will offer a 450-MHz Pentium II by the end of 1998 with 512 KB of cache. These will continue to be based on Slot 1. By the middle of 1998, Intel will unveil its Slot 2 version of Pentium II, which will support up to eight processors and run at 450 MHz. This processor, designed to replace the Pentium Pro, will support up to 2 MB of cache, according to Intel officials. For mobile computers, Intel will unveil a small form factor Pentium II with 512 KB of integrated Level 2 cache that relies on 1.7 volts of power. Speeds will reach 300-MHz in the next year. The economic stability in Asia was another key concern going into the 4-hour meeting, Powers said. If sales in China are slow, Intel could miss analyst expectations for the fourth quarter, said Powers. He said all indications, however, are that Intel will meet expectations. The inventory transition to build-to-order and channel assembly is nearly complete as well, reported Paul Otellini, Intel executive vice president and director of Intel sales and marketing. The result, however, will be a loss of $500 to $750 million on revenue in 1997, Powers said. "We find that they are moving to a one, one-and-a-half, week in-house inventory and a two-and-a-half to four-week channel inventory at most. This represents a 35 to 50 percent reduction in the amount of inventory that was in the channel from a year ago," Otellini said during the meeting last Friday. Copyright (c) CMP Media, 1997.