[opendtv] News: New Focus for Intel: The Home

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
  • Date: Fri, 30 Dec 2005 08:31:24 -0500


New Focus for Intel: The Home


Published: December 30, 2005

Intel, the world's biggest chip maker, is breaking away from its 
longstanding love affair with pure computing power to remake itself 
as a consumer-friendly brand that will seek to dominate the digital 

Intel's strategy, based on a new generation of multimedia platforms 
and chips, will be unveiled next week at the Consumer Electronics 
Show in Las Vegas. For consumers, the technology shift will mean 
laptop computers with longer battery life and computers that will 
become digital entertainment hubs in the living room.

  When Paul S. Otellini, Intel's chief executive, takes the stage at 
the show Thursday, he is expected to present a new Intel focused on 
selling a digital lifestyle rather than hardware.

  Instead of bits and bytes, Mr. Otellini, the first nonengineer to 
run Intel, is expected to spend much of his time talking about cool 
new music and video features that will be made possible by the new 
home entertainment platform, called Viiv, and Core, a low-powered 
chip that will eclipse the Pentium M chip for portable computers.

The transformation of Intel will, in part, be defined by its new 
alliance with  Apple Computer, which has come to dominate the digital 
music business and is entering the nascent digital video market with 
its iPod players.

  Under the guidance of Eric B. Kim, Intel's senior vice president and 
a former marketing executive for Samsung Electronics, the company is 
poised to recast itself as a warm and fuzzy consumer company.

Mr. Kim, who was responsible in part for Samsung's transformation 
into a global consumer brand before joining Intel in September, is 
leading the company's rebranding effort, which will change the "Intel 
Inside" logo and introduce the new slogan "Leap Ahead" to tie 
together the company's many different platforms.

Yet despite the softer image, which will be presented in a wave of 
advertising next year, industry analysts said Intel's fortunes will 
still hinge on the ability of its chip designers to recapture some of 
the company's once unchallenged lead in the microprocessor business.

  In fact, the development of the new Core microprocessor, which will 
be announced at the electronics show, was the work of a team of 
Israeli chip designers, who are more emblematic of the old Intel than 
the new one.

Core, code-named Yonah, is a 32-bit microprocessor chip with two 
separate processing cores and the ability to conserve power and run 
cooler than previous Intel chips. The development of Core chips is 
the first in a series of bet-the-company moves that Mr. Otellini is 
making to stave off the challenge posed by Intel's rival,  Advanced 
Micro Devices.

  If Intel, based in Santa Clara, Calif., succeeds in its new 
strategy, it will largely be because it shifted away from its 
obsession with processing speed, a move that was dictated by the 
Israeli engineers who put the company on a path to building low-power 
chips beginning in 2000.

Core chips will make possible portable computers with longer battery 
life. Even more important, Core will be the microprocessor inside the 
Viiv multimedia platform for the living room, which Intel executives 
say will be the key to the company's future.

"With Yonah you will see super- small consumer machines," said Sean 
Maloney, Intel's executive vice president and general manager of its 
mobile computer business. "This will be one of the defining Intel 
strategies next year. We needed a technology like Yonah for the PC to 
succeed in the living room."

Indeed the entire consumer electronics and computing industry is 
waiting to see if Apple will be the first company to use the Core 
chip for its devices.

Steven P. Jobs, chief executive of Apple, will take the stage at 
Apple's annual MacWorld exhibition in San Francisco a week after the 
Consumer Electronics Show.

It is possible that Mr. Jobs will extend the company's iTunes video 
strategy from the current portable iPod video player into a 
Yonah-based set-top box that would permit Apple to define the next 
generation of home video as completely as it has dominated the market 
for digital audio.

While an Apple-Intel living room alliance might not emerge as early 
as January, most industry observers say they believe that Intel's 
alliance with Apple was shaped in part by  Microsoft's decision to 
pick the  I.B.M. PowerPC chip for its Xbox 360 game machine.

"Intel has begun tuning up Yonah for an orchestra we haven't heard 
yet," said Richard Doherty, a computer industry analyst and president 
of Envisioneering Inc. in Seaford, N.Y.

Yonah will clearly blunt some of the resurgence of Advanced Micro 
Devices. A.M.D., based in Sunnyvale, Calif., has long been a distant 
second to Intel. It began making serious inroads into Intel's markets 
in the last two years when Intel's strategy of trying to divide the 
64-bit and 32-bit computing markets failed.

While Intel created a new 64-bit microprocessor, Itanium, A.M.D. 
redesigned its existing 32-bit processor by adding 64-bit capability, 
allowing it to take market share from Intel in both the server and in 
the desktop computing markets.

But the laptop market and possibly the new market for living room 
computers based on PC designs is where future growth may lie. With 
Yonah, Intel stands a good chance of staying ahead of A.M.D. in 2006. 
Intel is expected to announce next week that several hundred computer 
companies will build systems based on Core chips.
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