Jerry Rogers, president and CEO of chip manufacturer Cyrix has a tough task battling with Intel, a company which holds 95 per cent of the chip market. But he is confident that Cyrix will succeed through a combination of high innovation and performance.
PCDN: How's the chip business?
It's going great right now though we've had a couple of difficult quarters.
Has it been difficult to win PC manufacturers from Intel who are confident with your chip design?
We didn't do the work we needed to in terms of design wins in the past. We've got in the cycle, rolled a couple of customers over. Vobis is a long-term relationship, we have [PC vendor] Tulip which covers 18 countries. Of the UK off-the-page relationships we have Granville Technology. Now we're seeing the benefits.
How do you cope with an uneven playing field?
It's pretty difficult if someone owns 95 per cent of the market. You have to work extra hard, but to say it's not a level playing field, to whine about Intel is a little overstatement in keeping up with the marketplace.
Can you match Intel's product line?
Cyrix is at the high-end and AMD is at the low-end if you range form 75MHz to 200MHz. We will have MMX in the January/February timeframe and we're pretty confident that by the first quarter of 1997 we can match up to Intel's full production line. If we give AMD an opportunity, they're going to take it.
Is your ability to match Intel restricted by the lack of your own production facilities?
No we're fortunate that we have a manufacturing partner like IBM. Some people talk about if you have your own facility maybe you have a cost advantage, but if you look at the total design we get in the market, we're way ahead of the competition.
What emphasis do you put on partnerships?
I don't think we have worked hard enough on partnerships. What we need to do is team up with companies who can help us bring complete solutions. Companies like Compaq and IBM four or five years ago were making 45 per cent margins, today it's 20 to 23 per cent. They have a lot less dollars and they'd rather spend them on marketing. Intel does theirs by themselves.
To what degree will you have to innovate in order to survive?
We have showed that we can produce innovative products. Microsoft showed our product line at the end of August for the PC97 concept. It's a full-featured PC, the architecture is different and it provides you with a different price point for thin-client network access. We think there's a lot of opportunity and we're ahead of the competition.
Why will Cyrix be a better proposition than Intel and AMD for these low-cost devices?
Six months ago they weren't interested and they were very vocal about it. A couple of weeks ago they started changing their minds and began staffing it up. We've been working on it for three years. Maybe Intel can do enough to be only 18 months behind.