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Intel has made strong inroads into the server market with its new 32-bit Xeon chip, but will have to work hard to be successful in the high-end.

According to Kevin Krewell, semiconuctor analyst at Cahners In-Stat/MDR, "muscling in on IBM and Sun's 64-bit territory will take considerable ingenuity but Intel may be up to the task".

The chip giant plans to roll out products that should enable it to pull ahead of rivals' benchmarks, but the evolution will take several years, says the research firm in its latest report on Intel's server and workstation processors.

But to succeed, Intel must match or exceed its competitors in reliability and serviceability as well as performance.

The Xeon is the company's server version of its Pentium 4 chip, while its Itanium product is its first 64-bit chip. It also has a line of products aimed at the blade server market, referred to the Pentium III-S (previously the Pentium III Xeon).

The current Itanium does not pack many punches, but next generation McKinley processors will offer architectural improvements.

The report says Intel's increased focus on the server market is partially to offset declining prices (and profitability) on its desktop processors. Average selling prices (ASPs) on desktop parts fell 51 per cent this year, in contrast with workstation and server CPUs which should have stable CPUs during 2001 and begin sinking in the second half of next year.®

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