31st > October > 1999 Archive

The Register breaking news

How Intel spreads its risks…

Column The day was, and it wasn't that long ago, that Intel was perceived as a one product company. That product was the x.86 microprocessor and we noted some four or five years back how it was extending its tentacles into other areas of the PC industry, including, or especially, the networking business. From a position of being nowhere, last year Intel became the top worldwide supplier of network interface cards (NICs), toppling 3Com from its commodity pile. How prescient Intel was. Speaking at its analyst meeting last week, CEO Craig Barrett presented Intel's mission as now being the "building block company", a phrase we first heard at its Developer Forum in February but which it has repeated, at regular occasions, whenever it's had the chance, since. Almost unnoticed, Intel has positioned itself in a strong position by acquisition -- practically one a month this year. And at the last Developer Forum in September, it took the unprecedented step of spending quite a bit of time telling the world's press about the reasons behind its acquisition of key network technology, rather than just banging on about its latest chips. A quick look back at Intel history reveals, however, that the company has always realised its vulnerability, depending on who the contenders were and what the marchitects perceived as the threat. Intel doesn't always get it right, it has to be noted. Barrett and the other Intel execs spent some little time at the conference call last week promoting the virtues of the forthcoming Timna chip, a useful little number with an x.86 core which is really a system on a chip and is intended to be a thorn in the side of National Semiconductor and its Geode. Brian Halla, CEO of NatSemi, realised around this time last year that competing head-to-head against Intel with its Cyrix x.86 offerings was a waste of time and money, and spent his time pushing a system-on-a-chip concept, hurrying up his designers across the world and so able to introduce the Geode in August. At the time, Halla and other senior executives at NatSemi made it clear that there was only a limited window of opportunity and so have ramped up Geode I in volume, while designing Geode II at the same time. In price and performance terms, NatSemi has the advantage that the Geode exists, in volume, and the company has already had a number of design wins, as we have reported. NatSemi has a fairly respectable track record in embedded systems, while Intel has often seemed to regard this market as a place to sell chips it has already made redundant. There isn't a great deal of margin in chips for set top boxes and appliances, however. NatSemi refused to tell us how much the Geode cost but we're not talking Coppermine talk here. Intel, meanwhile, has had to face the fact that its high end and lucrative Pentium desktop market, and even its even more high end Xeon server chip line has suffered price erosion during the year, because of competition from AMD and because time, in the shape of other companies including IBM, Sun and Compaq, is ever merciless. The Internet market is a very different kettle of fish and by positioning itself as a major building block player, Intel has something of an advantage on its competitors, notably IBM. Big Blue has the stretch and technology to take on Intel and beat it but while it has the architectural strength, it doesn't have the marchitectural infrastructure or Chipzella's worldwide reach. So Intel will continue to turn in good results on its microprocessors, fend off competition from AMD on the x.86 front, and position itself as a real power in the system-on-a-chip market. While the world waits for Coppermine chips in volume, Intel will continue to supply .25 micron parts, profitably and through its well-established sales channel. But Chipzilla being all things to all men in all of the industry? We'd rather doubt whether even Intel could pull that one off. ®
Mike Magee, 31 Oct 1999
The Register breaking news

Intel sues FIC, Everex as Via legal action mounts

Intel has expanded its legal war against Via Technologies by filing a bevy of fresh lawsuits against the Taiwanese chipset maker as well as companies that have adopted Via's products. As predicted here in mid-September, legal action has been extended to include mobo manufacturers, including UK and Singapore companies, and smaller PC manufacturers, as well as renewed action against Via in the US. FIC, a well known motherboard manufacturer, and Everex are named in the legal actions. That has prompted one individual to write an open letter to a number of hardware sites and to his congressman suggesting the Federal Trade Commission (FTC) re-opens its investigation. Intel sued Via back in late June after it appeared that the Taiwanese chipset company's PC-133 solution was stealing thunder from plans that the chip giant had itself. At the Computex show in Taipei, most mobo manufacturers were voting for Via rather than Intel solutions, as reported here at the time. Via was a prime mover in organising the PC-133 SDRAM trade association. According to an insider at Via at the time, Intel was particularly angry that its licensee might be able to produce chipsets, and so also motherboards, that would support the 133MHz front side bus ahead of time, using SDRAM rather than Rambus memory. Sources said that Intel has sued both UK and Singapore companies, naming Via as a third party in the law suits. Everex, a PC manufacturer, is one of the companies named in the new actions. The new legal moves could well be a warning to larger Via customers, such as IBM and others, to steer clear of Intel's competition. But because of the debacle over i820 motherboards recently (Caminogate), Intel representatives have suggested people use Via chipsets in the meantime, which makes the fresh legal moves all the more surprising. Meanwhile, Warren Steiner has penned an open letter to The Register and a large number of other hardware sites, suggesting that the FTC re-open its investigations into the chip giant. According to Steiner, who repeats allegations about shortages of BX chipsets being used as a marketing tool by Intel, the chip giant is also threatening the success of Athlon AMD in the marketplace by putting extra pressure on Via, which manufacturers chipsets which support the alternative microprocessor. He adds in his letter: "Intel's opposition to VIA's Apollo Pro 133 chipset is based upon two points. VIA proceeded to produce a chipset which would support 133 FSB in advance of Intel's implementation and release of a chipset supporting 133 FSB. Further VIA chose to support 133 Mhz SDRAM instead of the more expensive Rambus memory supported by Intel. Intel is a major stock holder in RamBus Ink and stands to gain financially should RamBus become an industry standard. For this reason, Intel has been trying to force RamBus support upon all manufacturers, whether they want it or not, and clearly most manufacturers do not." Intel has denied that it is behaving unethically. Tonight it is Halloween, when, as German legend has it, Eckhards roam the streets... ®
Mike Magee, 31 Oct 1999
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Drew Cullen, 31 Oct 1999
The Register breaking news

'Virgin Mobile worth £1.4 billion without selling a single phone'

Virgin Mobile is worth £1.36 billion and it hasn't sold one phone. Who is responsible for this ludicrous estimate? Look no further than broker Investec Henderson Crosthwaite, which bases its claim on sales projections up to the year 2009. That's right, 2009. This is the year that Virgin Mobile should have 3.65m customers. Oh, and 2002 is the year when Virgin Mobile moves into profit. "The aspirational Virgin brand is a particular threat to Orange," Chris Godsmark of Investec told an unusually credulous ST. Yeah, Right. In the UK, Virgin muddied its brand with its foray into trains. Let's see what happens to the brand, the first time, there's a Virgin plane or Virgin train crash Virgin Mobile launches next week. It is a joint venture between the Virgin Group and One2One, with Virgin providing the retail thump, and One2One supplying the difficult network stuff. Handsets will be more expensive than from other providers, but tariffs will be much cheaper - maybe 50 per cent lower, the ST says. Virgin will sell phones and airtime contracts through its 310 Our Price and Virgin Megastore shops, giving it the "largest high-street presence of any existing mobile company". And that makes Virgin Mobile worth £1.36 billion? ®
Drew Cullen, 31 Oct 1999
The Register breaking news

UK PC retailers don't rip off customers

Surprise, surprise, British computer retailers have been cleared of ripping off their customers. Brits pay more for their PCs because they buy higher spec machines than other Europeans, according to The Office of Fair Trading. This is not exactly a huge surprise. In March, someone in the know briefed the ST on what the result would be. After a ten-month investigation, the OFT has worked out that retailers - and more specifically Dixons Stores Group, are not making excessive profits. What took it so long? The case against Dixons had no merit then. And it has no merit now. The OFT enquiry was sparked off by an intervention by Peter Mandelson, the trade and industry secretary at the time. His interest was piqued by a ludicrous attack by Intel's Craig Barrett on Dixons, the UK's biggest computer retailer, at last year's Comdex. British PC sales were lower than in some other European territories because Dixons margins were too high, he claimed. A few weeks later Barrett was forced to eat humble pie - his grovelling letter of apology to Dixons somehow made its way to the press. Last summer, Fujitsu UK attacked Dixons prices, in a high-risk PR campaign. High-risk because Dixons is a litigious company. Several publications, more sedate than The Register, fell for the Dixons Rip-Off story. And several publications ended up apologising to the retailer. ® Related stories So are PC retailers responsible for 'Rip-off' Britain? Dixons cleared of overcharging
Drew Cullen, 31 Oct 1999