SAN FRANCISCO — Intel Corp. executive vice president Paul Otellini opened the 1999 business year today with a new assault on the retail low end of the personal computer CPU market. New Celeron CPU speed grades and prices, further reliance on less expensive plastic PGA packaging in place of the ill-accepted single-edge Slot-1 card format, and promised new core logic chip sets will be Intel's weapons of choice.
"Candidly, Intel was not happy with our performance in retail PCs in 1998," Otellini stated. "We were slow to respond to the needs of that segment."
Otellini said that Intel's launch of the low-priced Celeron CPU line, though belated, had been highly successful. "Celeron has been the fastest-ramping Intel processor product in history," Otellini said. "We saw shipments quadruple between the second and third quarters. And it appears that when the fourth quarter numbers are announced, shipments will have doubled over the third quarter. By the end of 1998 things were looking much better. It takes about nine months to really burn a new product name into the public consciousness."
Otellini declined to give quantitative targets for market share in the retail segment, but said Intel "has been accustomed to market share numbers that begin with an eight."
Otellini described a low-end road map to reach that goal in which Intel will rely on existing ideas and processes, rather than dramatic change, to regain market share. The company will continue to ramp prices and clock rates on the existing Celeron architecture, which combines the Pentium-derived Deschutes processor core and L1 cache with 128 kbytes of on-chip L2 cache. The current turn of the crank has the company offering 400-MHz and 366-MHz versions of the processor. The least expensive of the Celerons, the 300-MHz A-version, will now sell for $71 each in 1,000s.
As 1999 progresses, Intel will turn its attention to other parts of a PC system for continued cost reductions. Toward midyear, marketing manager Ron Peck said Intel would introduce its first core logic chip set with integrated graphics. In addition, the company will continue to tune PC hardware for more effective execution of such tasks as modem signal processing, audio processing and DVD playback in software.
In yet another try at a long-standing Intel campaign, the company will also attempt to gingerly edge the ISA bus out of the low-end PC architecture, and to replace it with a combination of integration and Universal Serial Bus peripherals. Simultaneously, Intel will campaign in the industry to establish a new mechanical form factor and power supply specification in the hope of creating a core design that will yield economies of scale for all low-end PC manufacturers.
These initiatives will, at least for the near term, preclude major architectural initiatives aimed at speed. Peck said that Celeron systems in 1999 will focus on the existing 66-MHz front-side bus and commodity SDRAM main memory, rather than moving to higher front-side bus speeds and Rambus-Direct DRAM. The company believes that inclusion of large L2 caches on the Celeron die will reduce the pressure on the external bus, making both chip-level processor sales and 66-MHz buses viable in the low-end market.
