Intel's pain is your gain

Intel's stock has soared so high for so long, it may seem like no big deal that it has come down a bit. As a customer, you certainly don't care whether the company's disappointing quarter was because of slowing PC demand, channel inventory adjustments or the impact of cheap Asian currencies. But occasionally there are deeper explanations that are worth understanding.

This is one of those times.

For the past 18 months, I've been saying that until at least the turn of the century, network computers will be much more of a metaphor than a market. This has never been more true than it is right now. While network computers from IBM, Sun Microsystems and Oracle continue to have just about zero market impact, the power of network-centric computing is changing the very nature of the PC business.

You have a good sense by now of what network computers are all about. Desktop computers are more like network access vehicles than separate computing platforms, and IT investments have shifted toward the enterprise network infrastructure. The logical consequence is that the overall pace of PC upgrades should slow, and when you do buy additional PCs, you will likely trade lower performance for lower prices. Those lower prices will further the long-term goal of device ubiquity, despite today's apparent unit demand blip.

From Intel's perspective, that is a mixed blessing. Since the company is the world's only high-volume, Microsoft-compatible chip manufacturer, the more PCs the better. On the other hand, Intel has always benefited enormously from customers' willingness to adopt its latest and fastest microprocessors. That mutual commitment is fading away.

Remember how employees used to beg, battle and barter for advanced 286-, 386- and 486-based systems? That meant customers and Intel were on the same upgrade cycle - a concept consistent with a PC-centric view of computing. But in a network-centric world, the gap between what Intel can provide and what customers need will steadily widen unless a whole new range of desktop applications emerges. That's why Intel is emphasising audio, video and 3-D technology.

But that strategy isn't working yet. Intel made a big deal about its MMX multimedia technology, but what has been the real customer impact? Now it is rolling out a low-end brand called Celeron. This will be tricky. Andy Grove and company have spent the past few years telling us we are nowhere if we don't have a Pentium. Now that the low end is by far the fastest-growing PC segment, that message apparently will change fundamentally.

Competition is critical to this whole process. As a customer, you may not think much nor often about AMD and Cyrix. They remain minor players that have often found it hard to keep their promises. But if it weren't for their perseverance, imagine what Intel's prices would be like today. Barrack for them. Like Amdahl, they are probably destined to save customers far more money than they ever earn for themselves.

Don't get me wrong: Intel's future is still incredible. Once its 64-bit Merced chip is available, it will take over the server market for Windows NT and Unix-type systems - an unprecedented achievement. And someday, we will almost surely want our computers to speak, hear and see. But in the meantime, PCs are looking more and more like network appendages. And as long as that is the case, falling prices will be the spirit of the times.

(Moschella is an author, independent consultant and weekly columnist for Computerworld. His e-mail address is david_moschella@cw.com)

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

David Moschella

PC World
Show Comments

Father’s Day Gift Guide

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?