Chips With Everything
Intel's dominance of the PC processor arena has spurred itsstruggling competitors to look beyond the desktop for new ways with chips.Fork in hand, Geof Wheelwright gets stuck in
With the dramatic success of Intel's Pentium and Pentium Pro processor ranges it's hard to imagine just how its many and varied competitors can survive in the desktop personal computer business. But surviving is just what they plan to do, with many pinning their hopes on new hardware platforms based on Internet access devices as their potential saviours.
Recently, none has been more vocal about such plans than Sun Microsystems with its Pico Java 1 technology. The US trade press was full of reports in October about the company's deals with chipmakers Northern Telecom, Xerox, LG Semicon, Mitsubishi Electric America, Samsung, and NEC to license the new Java-based chips - which Sun claims will offer huge performance advantages over Intel chips when running Java code.
It is not entirely clear what all these Java-oriented processors will be used for - although many are expected to find their way into network computer-style desktop devices - while others could end up in wireless and handheld devices such as pagers and cellphones. Xerox, meanwhile, is expected to use the chips in future office equipment offerings.
Until the arrival of the network computer and Sun Microsystems' Java technology, much of the hope for Intel's Risc-based competitors was pinned on the notion that Risc systems could be developed to use Microsoft Windows NT and run 32-bit Windows applications just as happily as Windows 95 or NT running on an Intel box.
As it turned out, when Microsoft did develop NT for those Risc systems, it was possible to run Windows NT applications on them - but only using specially written versions for Risc implementations of NT. Not many software vendors offered Risc implementations.
This month, the final nail went in the coffin for some Risc-based implementations of NT when Microsoft announced it was in the process of phasing out future development and engineering efforts for the Mips platform.
Microsoft said the decision was driven by decreasing demand for Mips-based systems from its customers and OEMs. In particular, Microsoft said its largest OEM for the Mips platform - NEC Corporation - had decided not to provide the Mips platform beyond the Microsoft Windows NT version 4 operating system.
In addition, the company boasted that, over the past five years, it had shown a strong commitment to the Mips platform. But Microsoft says that it will continue offering technical support to its customers that use Windows NT 4 on the Mips platform.
The challenge facing Intel's competitors is evidenced by Cyrix Corporation.
Over the summer it reported revenues for the quarter ended 30 June of $27.1 million - down 46 per cent from the $50.2 million reported for the same period last year. Revenues for the first six months of 1996 were $78.7 million, down from $135.4 million for the same period last year.
The company recorded a net loss of $16.4 million for the quarter ended 30 June, compared with net income of $7.5 million for the same period last year. 'Looking beyond the second quarter, Cyrix' biggest challenge is to grow its customer base,' said president and chief executive Jerry Rogers at the time. 'The 6X86 processor is a very competitive product in today's market, outperforming equivalent Pentium and Pentium Pro processors at a significant discount.'
Rogers also hinted that it was very much in the computer industry's interests for Cyrix to survive its current troubles. 'We know that we must drive this value proposition as aggressively as possible to obtain market share for the product line and value for the shareholder,' he says. 'The survival of competition and product innovation in the X86 market demands unyielding focus and execution.'
At the same time, Cyrix made clear just how it intended to do this by announcing aggressive pricing for its P200 desktop PCs. For example, the price of Cyrix' fully configured 6X86 P200 system was unveiled in July at $2,299, loaded with 16Mb of EDO DRam, a 2.5Gb hard disk drive, WRam graphics, 8X CD-Rom, stereo sound and speakers and including a 15in monitor.
The company suggests that it is starting to get corporate orders for systems using this technology. 'Since its introduction, the P200 PC has become our best selling model,' says Steve Lapinski, general manager of the Cyrix Systems Group. 'We are seeing strong demand from power users in Fortune 1000 companies, as well as small businesses and home offices where performance is key to the buying decision. For $2,299, users can now standardise on a high-performance platform for all PC software, from Windows 95 to Windows NT to Windows for Workgroups.'
Things aren't much better at longtime Intel rival AMD, which in October reported a net loss of around $38.2 million on sales of $456.8 million for its third quarter ended 29 September 1996. Sales for the same period 1995 amounted to $606.9 million, resulting in net income of $42 million.
But according to AMD, this is still good news. 'Overall, bookings improved significantly from the levels of the second quarter, but the book-to-bill ratio remained below 1:1,' says AMD chairman and chief executive WJ Sanders.
Sanders claims that PC-based business is one of the growth areas for AMD and that the figures reflect this. 'Revenues from our computation products group (CPG) - primarily Microsoft Windows-compatible microprocessors - grew from the previous quarter. Shipments of AMD-K5 microprocessors more than doubled to 500,000 units, led by sales of the AMD-K5-PR100 microprocessor. With the introduction of AMD-K5-PR133 and AMD-K5-PR120 devices, the AMD-K5 family now addresses some 70 per cent of the desktop market,' says Sanders.
Sanders admits that revenues from the other parts of AMD's business would 'not offset the losses we are incurring in CPG, where revenues are currently insufficient to absorb the substantial fixed costs of maintaining our strategic commitment to the Microsoft Windows-compatible microprocessor market.'
AMD also announced what it has dubbed the Lan SC400 microcontroller designed for mobile applications supporting Microsoft embedded operating systems and development tools. The new chip is supposed to be compatible with MS-Dos, Windows 3.1, Windows 3.11, Windows 95 and Windows NT software.
The company says this new microcontroller combines AMD's well-established 486 core with a set of mobile application-specific peripherals into a single-chip PC/AT compatible microcontroller (which effectively provides the guts of a PC on a chip).
At least AMD has got Microsoft singing the praises of a chip not designed by Intel. 'An increasing number of designers are looking at X86 embedded solutions, and we are enthusiastic about AMD's Lan SC400 device and its capabilities,' says Ray Kanemori, senior manager for Microsoft embedded products. 'We believe the new Lan SC400 product offers an attractive alternative for systems makers that are looking to enable smaller, more powerful dedicated systems.'
AMD says that the processor is ideally suited for the emerging generation of ultra small point-of-sale, data collection, Internet browser, mobile terminal and smart phone mobile devices. In addition to power management, PC/AT and LCD graphics control features, the microcontroller integrates a number of common peripherals useful for mobile applications. These features include a serial port, parallel port, real-time clock, a dual PC card controller and a matrix keyboard controller. In addition, an IrDA (Integrated Infra-red) feature supports high-speed wireless communications.
All features of the Lan SC400 microcontroller comply with industry standards.
On the desktop, AMD also announced earlier this month two new, 'higher performance' members of its AMD-K5 processor family, the AMD-K5-PR133 and AMD-K5-PR120 processors. AMD says these new processors 'deliver system performance equal to or better than 133MHz and 120MHz Pentiums', respectively, based on P-Rating tests using the Winstone 96 benchmark.
AMD hopes the chips will put it back in the Pentium-class mainstream.
'Some 70 per cent of the desktops sold today are in performance ranges up to PR133,' says Larry Hollatz, vice president and general manager of AMD's Texas microprocessor division. 'These new AMD-K5 family members put AMD solidly back in the mainstream desktop market,' he says.
AMD also says that the AMD-K5-PR133 and PR120 processors will provide Socket 7 hardware compatibility that enables PC manufacturers to take advantage of prevailing fifth-generation system designs and infrastructure.
This Socket 7 compatibility is supposed to minimise system redesign and development cost and speeds time to market.
In addition, AMD is at pains to point out that the AMD-K5 processor is licensed by the Microsoft Windows hardware quality labs to carry the Windows 95 logo and has received compatibility certification from XXCAL, an independent testing laboratory.
The company says further that the AMD-K5 processor is not only compatible with the Windows operating system, but also with the installed base of X86 software, including Novell Netware and OS/2 Warp operating systems, and more than 60,000 other software packages.
The implication of all this is that Intel still has some credible competition. That means there can still be systems developed for sale by Vars, resellers and dealers that are not tied to a single family of processors sold from one Intel price sheet. Non-Intel Windows-based systems will continue to be able to be offered to customers at highly attractive price/performance points.
The tantalising prospect of a business that could grow up around network computer-style systems that require only the ability to run browsers and execute Java code makes the whole market a different proposition for dealers and developers alike. Now there is absolutely no iron-clad guarantee that this will happen, but there are enough major players with a vested interest in it to make sure that the market will have a damn good try.
Beyond the companies mentioned above, there are those with deep pockets and strong technology commitments to chip technologies - notably Motorola, IBM, Apple, Digital and Silicon Graphics (See Feature, Page 39) - who are still committed to chips like the Power PC, the Digital Alpha and the SGI Mips family.
The recent announcements by Microsoft that companies other than Intel will be supplying processors for a number of the first Windows CE-based handheld computers expected to hit the market in the next few months should also have a big impact on the future of chip companies.
But all that is yet to come and until it does, Intel will continue to stay so far out in front that all the competition can do is track its progress in inches per minute, while Intel is still moving at miles per hour.