Intel looks to emerging markets for 2004

Shipments of Prescott, the 90-nanometer successor to intel's Pentium 4, will account for 60% of all Intel desktop processors by...

Shipments of Prescott, the 90-nanometer successor to intel's Pentium 4, will account for 60% of all Intel desktop processors by the second quarter of next year, and a version of the technology will be incorporated into the Celeron product line, said Intel president and chief operating officer Paul Otellini.

Otellini added that Prescott's clock speed will hit 4GHz by the end of next year. The chip will ship in this year's fourth quarter, but systems based on the chip are unlikely to have much impact, if any, on the holiday shopping season.

Otellini and Intel chief executive officer Craig Barrett updated the analyst community on a number of Intel's products, and outlined some of the company's strategies for increasing revenue outside of industry growth.

It will be hard for the company to grow any faster than the general market in those areas, Barrett added, because of the dominating presence Intel enjoys in the PC and low-end server markets. Intel intends to pursue business in emerging markets such as China and India, and emerging technologies such as the WiMax metro-area network wireless technology.

Most of Intel's growth already comes from outside the US, and that trend will likely continue over several years, Barrett said.

Intel will ship its first WiMax chips by the end of the year, Otellini said. WiMax, based on the 802.16 standard ratified by the Institute of Electrical and Electronics Engineers, is designed to connect users wirelessly over an area measured in square miles, rather than the more limited coverage afforded by Wi-Fi wireless access points and devices today.

The company will also ship its first chip that combines Bluetooth and Wi-Fi next year. Intel recently purchased Mobilian, a company that has developed a Bluetooth/Wi-Fi chipset.

Mobile technology has been a huge growth area for the company, as many consumers and businesses have replaced older desktop PCs with notebooks. Dothan, the 90-nanometer follow-on to the Pentium M, is also scheduled for introduction next year.

On the server side of the business, Otellini announced that Intel has now shipped 100,000 Itanium 2 processors, comparable to the unit volumes shipped by companies such as Sun Microsystems and IBM which also make processors for high-end servers.

The road to Itanium's adoption has been bumpy, but its growth has come at the expense of Sun, Otellini said.

"Sun, as Craig [Barrett] recently said, is now the Apple of the server world. They're not in a position to drive standards," Otellini claimed, alluding to the deal that Sun announced on Tuesday to adopt Intel competitor Advanced Micro Devices' Opteron chip in a line of low-end servers.

However, Intel also acknowledged that its decision to raise flash memory prices in the beginning of 2003 cost it both market share and revenue. The company hopes to make up ground in flash shipments with the rise of multilevel cells, which combine flash and static Ram memory chips into a small package designed for smartphones and high-end PDAs.

Tom Krazit writes IDG News Service

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