To: Jim McMannis who wrote (68689 ) 11/17/1998 8:55:00 PM From: Paul Engel Read Replies (3) | Respond to of 186894
Intel Investors - Katmai Launch Appears Set for February 28, 1999 Note that Intel seems determined to compete in PCs going down to $399 - so the Integrated CPU (circa 2000) may be targeted to this market. Paul {========================}techweb.com Intel Will Push For $399 PC (11/17/98, 5:35 p.m. ET) By Mark Harrington, Computer Retail Week While cheap PCs aren't everything, Intel is working on an integrated chip that could pave the way for $399 Intel-based systems by 2000. Paul Otellini, executive vice president and general manager of Intel's architecture business group, said the below $399 price point "is a target for us." But Craig Barrett, Intel's president and CEO, sought to put the cheap-PC market in perspective. Calling Intel's apparent unpreparedness for sweeping market-share losses in sub-$1000 PCs past history, he said the U.S. retail business is only a small portion of the global PC picture. "The whole world is not U.S. retail," he said. Otellini said Celeron, the heart of Intel's so-called "basic PC" effort, is "doing really well," and that higher-level Celeron chips are ramping at record levels at Intel, in Santa Clara, Calif. He said Intel won't resist the low-end market, much as it appears to wish prices would maintain higher levels. "Rather than fight gravity, we decided to go with the flow," he said. At the same time, Otellini said, his talks with retailers indicated most want to find a way to get out of the "noise" of the low end and move beyond yet another, cheaper box. To bolster its position, Intel is introducing a new level of MMX-like instruction sets in the first quarter of next year that will push the technological envelope and raise prices. Otellini called the forthcoming introduction of the higher-level Pentium II systems, code-named Katmai, "the most significant change we've done to the instruction sets," and predicted strong software support and a weighty marketing campaign based on its Internet capabilities. "It will be our biggest launch ever, no question," he said. Sources said they expect Katmai to be introduced on or shortly after Feb. 28 in 450-MHz and 500-MHz speeds. At an Intel briefing with reporters at Comdex/Fall '98, officials said the OverDrive upgrade program will eventually be phased out. They also said Intel has moved much of its order-taking from OEMs onto the Internet (at a $1 billion-per-month run rate), confirmed the Pentium II will sport a 133-MHz system bus, indicated the company could be open to an acquisition in the home-networking arena, and rebuffed indications that Moore's law is slowing down. "I think the cycle is speeding up," said Barrett, when asked if the premise that microprocessing power doubles every 18 months is being challenged by consumers' desire for slower cycles. "Technology generations have gone from a three-year cycle to two years. It's permanently speeded up." Barrett also countered indications that Intel's relationship with Microsoft has been damaged by testimony from an Intel executive that the software giant attempted to block Intel's efforts in the software business. "I think the companies work well together," he said. "We're improving as time goes on, working together to bring new technology into the marketplace." Barrett spoke at length of the continuing complexity of home and business PCs, and said Intel continues to push OEMs to make them more like other home electronics. He said such a plan will require PC makers to "get rid of a bunch of legacy" technology that allows compatibility with the earliest PCs. Otellini said Intel will play its part. "To lower complexity typically requires more technology," he said. Barrett said until setting up a PC is as easy as setting up a CD player, involving no more than plugging in connectors and turning on the system, there remains much work to be done in the industry.