ITG shopping list: Communications, consumer electronics

Who's next?The IBM Technology Group's growing list of OEM partners reads like a who's who of technology companies, cutting across both consumer and business segments.

Who's next?

The IBM Technology Group's growing list of OEM partners reads like a who's who of technology companies, cutting across both consumer and business segments.

Later this year, IBM is expected to announce design deals with Canon Inc. and Eastman Kodak Co. to provide specialized components for forthcoming digital cameras from both companies, sources said.

The company is also in "mature discussions" with Compaq Computer Corp. to manufacture the Alpha processor and possibly other aspects covering components or intellectual property, said Tony Baker, director of business development at IBM, of Armonk, N.Y.

The two companies have been in discussions about Alpha manufacturing since October 1997, when the Federal Trade Commission mandated that Digital Equipment Corp., which owned Alpha at the time, find alternate manufacturing sources in the wake of Digital's patent infringement settlement with Intel Corp.

Last year, IBM held discussions with Sun Microsystems Inc., of Palo Alto, Calif., to build the SPARC processor. IBM would not comment on the status of those talks.

Russ Castronova, a spokesman for Sun's Microelectronics division, said the company has no plans to have IBM manufacture its UltraSPARC, which Sun currently outsources to Texas Instruments Inc. Castronova declined to comment on which company Sun will choose to manufacture its forthcoming MAJC (Microprocessor Architecture for Java Computing) embedded processor, which is due in the first half of next year.

Another potentially major customer is Gateway Inc. The North Sioux City, S.D., company's Amiga division is developing a wide range of information appliances, including game players and Web access devices. A deal with Amiga would be a boost to ITG's plan to enable "pervasive computing."

Gateway already has a cross- licensing agreement with IBM, but Gateway officials wouldn't say what the deal covers.

Neither party would comment on a potential deal with Amiga.

ITG's touch isn't always golden. The group attempted to strike a component deal with Hewlett-Packard Co. but was rebuffed. "Nothing was of high interest," said a source close to HP, of Palo Alto.

Jim Vanderslice, senior vice president and group executive of ITG, wouldn't comment on specifics of the group's discussions, although he hinted it was simply a matter of the timing not being right for a deal.

"It's a temporal thing," Vanderslice said.

He added that ITG is segmenting its spheres of focus into target areas, with communications—both wireless and wired—a potential hotbed of activity.

"Silicon germanium will be huge for all kinds of communications products," Vanderslice said. Silicon germanium is a process for developing low-power, small but fast processors for communications equipment. The first chips from this manufacturing process are expected next quarter.

ITG is also targeting non-PC devices, such as handheld organizers, WebTVs, multifunction cell phones and pagers, and in-car computers.

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