Intel banks on Pentium III - Part 1

It's the biggest launch in Intel history. Intel chief Craig Barrett is, as is the wont of Silicon Valley chief executive officers, promising nothing less than a "revolution" in the way computer users access the sights and sounds of the Internet. And he's plunking down $300m (£183m) just to market the notion that a microprocessor will create a "brand-new user experience".

In the past, Intel tended to introduce new generations of its market-dominating processors in a clubby atmosphere with a few computer makers and software suppliers. Those days are gone. With smoke rising from a stage floor and scores of media members on hand, Intel last week provided a preview of its new electronic brain - and 250 software developers, Web site operators and Net merchants were on hand to back it up. At the end of this week, Pentium III will be formally introduced to the public. And, by the end of the month, computer makers ranging from Compaq Computer in the U.S. to Legend in China will be hustling Pentium III systems, with prices starting at less than $2,000.

But these are unusual times for Intel, which is used to rolling in the dough and rolling over competitors. The monopoly is under intensifying pressure. While Microsoft is ensconced in a lengthy antitrust battle with the U.S. Department of Justice, Intel faces scrutiny before the U.S. Federal Trade Commission for alleged abuse of its market power. Intel is also considering the possibility that its hegemony in microprocessors may be at risk - from rivals it considered gnats in the past.

"The problem from Intel's standpoint is AMD [Advanced Micro Devices] is hot on their heels," said Tim Bajarin, president of Creative Strategies International. By the end of 1998, AMD had grabbed 29 percent of the hottest market in computing: processors for machines that cost less that $1,000. Two weeks ago, Intel launched a price war in the low-end market, and it neatly wrapped its Pentium III announcements around the announcement expected today of AMD's Sharptooth processor, formally called the K6-III.

But more important, over the next five years, the nice, neat Wintel world may draw to a close. International Data Corp. projects that by the year 2003, personal computers will no longer be the dominant device for accessing the Internet. As soon as 2001, cell phones, game consoles, handheld assistants, information appliances, network computers, set-top boxes and the like could represent nearly half of all Web access devices being shipped in the U.S. The issue, researcher Frank Gens has been arguing for the past year, is when Intel will introduce a non-Pentium product line to serve non-Windows machines.

But Intel will not introduce such products this week. For the immediate future, Intel has tied its fortunes to the Pentium III, which it claims to have "optimised" for the Internet. The Pentium III is the horse Intel will ride to keep demand high for its traditional market of systems that cost $2,500 and more, while AMD tries to use K6-III and its own three-dimensional technology to perhaps move up a notch to $1,300 or $1,400 systems.

Genealogically speaking, the Pentium III is a descendant of the MMX version of the original Pentium processor. MMX technology tried to speed up playback of multimedia content -- such as games and interactive educational software -- from hard drives. In the Pentium III, the floating-point calculations that make it possible to display rapidly changing shapes, colours and perspectives are boosted to "hyperspeed", said Richard Dracott, Intel's marketing director for desktop products.

For instance, visitors to The Sharper Image's Web site, which uses existing processors, see static images of clock radios; however, visitors to the site using Pentium III machines will be able to rotate such images to see all of a product's sides, open a clamshell design and insert a compact disc to hear the "soothing sounds" that are supposed to lull them to sleep.

The ultimate claim: that the Pentium III can display full-motion video at movielike speeds -- 30 frames per second -- on a full computer screen. The "wished-for 30 frames a second," as Cahners In-Stat analyst Max Baron puts it, is the holy grail of video programming for the computer.

To Net users who still are trying to recover from the herky-jerky, distorted, tiny images that made up the technically challenged Victoria's Secret lingerie fashion show earlier this month, this would seem like Valhalla. And it is indeed a fictional heaven, because there is a catch: Such fluidity and mammoth image size is only possible with a direct connection to the Net, transferring data at rates of 1.5 megabits per second or faster.

To the average PC user, a high-speed connection to the Web is still 56 kilobits per second -- or less. At those rates, Web pages will feature more and better stock tickers, rotating sports score boxes and animated features. But an audio and video tour de force that will rival over-the-air or cable broadcasting still will be a pipe dream, except for those users with exceedingly large pipes.

Part 2 looks at some of the claims made for Pentium III on the Web

For more information on the Pentium III, go to the Pentium III Special.