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Intel's release of Itanium replacement is imminent – analyst

2004: "The Year of x86-64-bit"

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A few gallons of rancid egg nog were poured this week all over the "Year of Itanium" celebration underway at Intel, as an analyst firm predicted Intel will not only give in and ship a x86-64bit chip but also that the product will be woefully behind in the market.

Rick Whittington at American Technology Research must have been cut off from Intel President Paul Otellini's holiday greeting list. Otellini has been telling all of his real friends that 2003 is "The Year of the Itanic," and has billed the chip as an undisputed success. The anlalyst, however, seems to have missed out on this holiday cheer because he predicts an x86-64-bit processor will "soon" arrive from Intel - a move that is sure to undermine the meager market Itanium has carved out.

"Our research suggests Itanium is in for a rough ride," Whittington writes in a recent research note. "Intel is now saying it will "go with the market" on 64-bit x86, thus is destined to unveil one when they think the market will ripen, which we judge as mid-2004 for volume delivery in 2005.

"This fateful step will necessarily consign Itanium to low volume, high end computing solutions as a mainstream, high volume x86 horse-race develops between Intel and long-time rival AMD that will push 64-bit x86 performance well into the low-mid range server territory for which low power Itanium was slated."

That's a fine how-do-you-do. It was just last week that Intel was toasting Itanium's success. Sure, it chose the unusual celebratory tactic of giving Itanium servers away to show how strong sales have been, but, hey, who is to deny the Itanium ramp. Intel is edging close to breaking the 5,000 servers shipped per quarter barrier. With robust sales right around the corner, why would Intel introduce an Itanic competitor now?

Well, it so happens that AMD is already moving more than 10,000 Opteron boxes a quarter. That's more than the total number of Itanium boxes shipped all year. If this x86-64-bit thing is taking off, Intel really would prefer not to be left too far behind. Add to that Sun Microsystems' recent entrance into the Opteron market along with IBM's support, and things start to seem a bit worrying.

"While Itanium can execute x86-32 in an emulation mode, the performance is not competitive," Whittington writes. "P4 and Xeon have been portrayed by Intel, until most recently, as the last answers in the x86-32 world and then the customer is forced to Itanium for 64-bit solutions - if they choose to stay with Intel! This is potentially a huge mistake because it opens the Intel customer to other non-86 competitors (IBM, SUN)."

Ding, ding, ding. We have a winner.

And how long will it take Intel to build up a real "ecosystem" of supporting products to go with its x86-64-bit chips?

"It will take Intel close to one full year to build a support infrastructure of motherboards, chipsets and graphics accelerators, leaving the 2004 playing field wide open for Advanced Micro Devices. For 2004, Intel will largely sell 32-bit x86 Prescott, Dothan and Xeon server processors with AMD steadily transitioning to 64-bits."

It is, however, actually a bit harsh to give Intel such a rough ride over Itanium. In the end, HP is the company that will likely suffer most if Intel does turn on 64-bits in its x86 chips. The folks at HP bought their own sales pitch and have been left backing the slowest selling 64-bit chip in the market only to find Intel may start coasting on its support for the product.

After more than a decade of watching billions be poured into the Itanic project, could it be the case that the chip has the power to sink parts of two companies at once? Somebody get Leo on the horn. ®

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