Although some newspaper reports claim that the chip giant fears AMD and Cyrix making inroads into its business, a more likely explanation may be the desire to kickstart a slow PC market, particularly in Europe where the uniform opinion is that the market is "dead".
"Certain economies in Europe are pretty flat," said Brendan Sherry, Cyrix UK managing director. "I don't think it's the UK so much as Germany which has traditionally been the engine for PC growth in Europe but has been hammered by the strength of the US dollar against the mark."
PC vendors agreed. "The market is dead, it's unbelievable" said Chris Bakolas, technical director of UK direct seller Dan Technology. "Board makers are selling at less than half price and people are fighting for survival. There's so much confusion with K6, M2 and so many different versions of Pentium out there at the same time. Particularly among corporates, they're saying 'let me go on holiday and decide when I get back'. In the UK, they're going to wait for the budget."
Another PC vendor who requested anonymity made similar points. "It's a triple whammy, with the UK and France just coming out of elections and Germany in a trough. If Gateway 2000 and Intel are warning of lower than expected revenues we're all in trouble."