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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: ed who wrote (50465)	3/11/1998 8:58:00 AM
From: greenspirit	Read Replies (1) \| Respond to of 186894

Ed and ALL, Article...Intel Uses Smart Integration For Low-Cost PCs... March 11, 1998 PC Week via NewsEdge Corporation : Anyone who thinks that the low-cost pc poses a threat to Intel's bottom line has only half the story. This year, the sub-$1,000 PC phenomenon has to prey on Intel's margins. Anybody can do the math. Lower-priced PCs demand lower-priced processors, right? But history has shown time and again that Intel, given enough time, can turn any threat into an opportunity. And the low-cost PC is no exception. How can there be an opportunity for a company accustomed to supplying $200 processors in a segment that demands $75 chips? Intel can charge more for its chips--processors and chip sets, which link processors to memory and the rest of the system-- provided those chips take on more tasks. And that, it seems, is just what Intel is planning. Intel has long dreamed of a PC in which the processor--an Intel processor in particular--does everything. including graphics, sound and communications. The whole shebang. This dream has taken on many different shapes over the years. Some of you may remember Native Signal Processing, or NSP, an early effort to suck more PC functions into the processor. More recently, the company added MMX, which is a set of instructions that make its processors more suited to handling audio, telephony and motion video tasks. Last year, the company issued a spec (AC-97 Rev 2.0, for those of you scoring at home) to chip vendors for an inexpensive device that would make it possible for the processor to handle all modem and audio tasks inside a low-cost PC. And early this year, Intel consummated its hyper-examined acquisition of Chips and Technologies Inc., a company with the product portfolio and design expertise to create low-cost, integrated PC chips. (How many of you remember the PC/Chip, a single-chip computer from Chips that found its way into a few handheld devices in the early '90s?) As a first step to prepare the industry for what's to come, company executives last month added a new term to the unabridged Intel-speak dictionary: " smart integration." By Intel's definition, smart integration means pulling other functions of the PC into the processor/chip set complex "where it makes sense." If you're an Intel executive, where it makes sense is at Intel. In fact, Cyrix made some noise last year with its MediaGX, a highly integrated two-chip set that handles core processing tasks as well as graphics and audio. Until recently, Compaq used the MediaGX in its low-cost Presario 2000-series PCs. Not very smart, by definition. Watch for smart-integration products out of Intel around the middle of next year. I expect that will mean a chip set with some graphics, audio and modem processing built in. Targeted at the low-cost PC market, the chip set will no doubt lean on a low- cost, Pentium II-class processor for computational support. Pretty smart, huh? It is, if you're at Intel. Mike Feibus is a principal for Mercury Research, which provides market research and consulting services to component and systems vendors. He can be reached at mike@mercury.org. _____________________________________________________________________ Regards, Michael