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Filter - Cynthia L. Webb
Intel Entertains a New Strategy


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By Cynthia L. Webb Staff Writer
Friday, June 18, 2004; 9:25 AM

"Digital home entertainment" is a hot buzzword this year in the tech sector, with companies from Hewlett-Packard to Apple trying to transform computers into one-stop shops for music, movies and watching TV. Now Intel is joining the gang with a new set of chips.

The new technology will "work in tandem with Intel's Pentium 4 processors to give PCs more powerful sound and graphics, a speedier link for peripherals and memory, and an ability to run a wireless data network. Having those features built into the core components of a computer could be essential to Intel's strategy as it tries to turn the PC into the heart of home entertainment without the need for expensive add-on cards," Reuters reported.

"Personal computer makers have long eyed the living room as the next frontier, hoping to revolutionize the way people watch movies, listen to music and record their favorite TV shows. Persuading people to stick computers in their TV cabinets has been another story: So-called entertainment PCs account for just 3% of U.S. sales. But the industry's drive to transform home entertainment may get a major boost Saturday when PCs with new innards from Intel Corp. go on sale," The Los Angeles Times reported. "Intel, the world's biggest chip maker, hopes the technology will usher in a new generation of PCs that help people manage their growing libraries of digital photos, music, games and videos. 'This is the most ambitious and significant makeover of the PC platform in more than a decade,' Bill Siu, vice president of Intel's desktop group, said Thursday."
Reuters: New Intel Chip Aims To Boost Features of Home PCs
The Los Angeles Times: Intel Hopes To Transform Home Media (Registration required)

The New York Times said Intel on Monday "is planning to announce its newest foray into the home computing market, blending performance, wireless capability and multimedia audio, video and image features into a set of chips that will be at the core of the next-generation personal computer. The new three-chip suite, which has been code-named Grantsdale, is also the clearest expression of the 'innovation and integration' strategy of Intel's rising star, Paul S. Otellini, the chief operating officer. That strategy is both a plan to lure consumers and a bet that Intel can create a new wave of growth in consumer electronics."

More from the Times: "That strategic shift will be very much in evidence on Monday when PC makers announce the first new computers based on Intel's new chips. Intel executives said that the new chips will make possible higher-speed computing, more reliable storage and more advanced audiovisual standards and will represent fundamental change in the internal structure of the standard PC. In a significant shift, the company, based in Santa Clara, Calif., will announce its fastest processor yet but will focus instead on the ability of the new chip sets to serve as a Wi-Fi base station, support a storage standard that protects against disk failure and allow users to view high-definition video and listen to higher-quality digital audio."
The New York Times: Intel Is Aiming at Living Rooms in Marketing Its Latest Chip (Registration required)

The Financial Times provided more details: "As the overall cost of components in a PC falls, this has helped the US chip company to defend its pricing and indirectly increase its share of the bill of materials in a standard machine. A chipset includes several building blocks of the PC, including the microprocessors for which Intel is best know[n]. The latest chipset makes it possible for PCs to play high-definition audio, doubles the graphics quality of the standard machine and has built-in wireless networking, Intel said. That mirrors Intel's strategy with laptop computers, where it has bundled WiFi and other functions into its Centrino product, and reduces the need for add-ons like high-quality graphics cards. Among its more technical features, Grantdale also speeds up the flow of data between different components in a PC, makes it possible to run a back-up hard drive -- a reliability feature previously confined to servers -- and supports a new memory technology called DDR2."

The Los Angeles Times said the chips "also offer more lifelike animation for game enthusiasts and make it easier to share music, photos and video over wireless networks. Computer makers such as Round Rock, Texas-based Dell Inc. and Poway, Calif.-based Gateway Inc. are counting on the backing of Intel to build a stronger market for their entertainment PCs, which are typically more expensive than standard desktop machines." Bloomberg said "Grantsdale includes a new graphics processor that will let computer gamers run three-dimensional games on a PC without having to by a separate graphics processor card."

eWeek said there is one key piece missing from Intel's product launch: "When PCs using Intel's 'Grantsdale' chipset launch next week, their ability to serve as a wireless access point won't be made broadly available until as late as the fourth quarter, Intel officials said Thursday. To enable the wireless access point, the Grantsdale chipset will require an Intel-specific PCI card that won't be available until later this year, Intel officials said." IDG News Service called the delay "another setback for Intel's wireless division. The company was forced to use wireless silicon from a third-party vendor at its Centrino mobile technology launch in March of 2003 after its own products were not ready in time. Intel eventually launched its own Intel-branded wireless chips later in 2003."
The Financial Times: Intel's Mindset Turns To New Desktop Chipset
Bloomberg via The Seattle Times: Upgraded Intel Chips Enhance Graphics and Sound
eWeek: Intel Delays Wi-Fi Support In Grantsdale Chipset
IDG News Service via PC World: Intel Readies New Chip Sets

The NYTimes also said Intel's challenge will be to make sure "it is not alone in focusing on growth in the consumer home entertainment market." More from the article: "In addition to offering consumers an entertainment media server, Intel, in demonstrations here on Thursday at a briefing for analysts and the press, showed a personal computer that is designed to fit in stereo cabinets and looks like a cable or satellite set-top box" and would cost $700 on up. The Reuters article said last month Intel "said it plans to sell Grantsdale chips for $30 or $40, no more than the prior generation of chip sets. But the extra features offered could steer shoppers away from PCs built with chips from rival Advanced Micro Devices Inc."

Unlike other Intel chip efforts, The Financial Times noted Intel "will not be able to rely on what has become the standard way that consumers judge its products - the underlying speed of its microprocessors. Instead, Bill Siu, general manager of Intel's desktop platforms group, said the company and PC manufacturers planned to promote the new chipset by highlighting the new experiences it would make possible." The New York Times pointed out something similar: "It's also an indication that chip makers may be reaching a point of diminishing returns with their microprocessors. After decades of enticing customers to buy each new generation of faster, more expensive chips, the industry is now emphasizing overall PC performance rather than sheer chip speed."

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