Intel wants PC for everyone

By MICHAEL FOREMAN

TAIPEI - Despite gloomy market research figures, senior executives at giant chip manufacturer Intel are denying the good times for the personal computer market are over.

"The best is yet to come," Intel's general manager of desktop platforms William Siu told delegates at the Computex computer trade show in Taiwan last week.

Mr Siu was speaking in the same week that market research firm IDC lowered its forecast for PC shipments in the United States this year from a 2.2 per cent growth to a 6.3 per cent drop from 2000 - the industry's first decline.

While Mr Siu conceded the industry had been challenged, he believed the bottom had been reached and, contrary to popular belief, the home PC market was not yet saturated.

He said the present penetration of PCs was roughly the same as the position achieved by the colour television set in the US market by 1972. By that time the number of US homes owning a colour set had reached about 65 per cent, just above the classic two-thirds ratio that, according to the business schools, represents saturation point.

"At that point you would have expected growth to level off," said Intel Architecture vice-president Anand Chandrasekher. "In fact, the volumes of colour TVs shipped doubled every year after 1973.

"What happened was that TVs changed their form factors and became easier to use, with things like remote controllers. Instead of having one set in your living room, you now had one in your bedroom, in your kids' rooms, or even in the kitchen."

Mr Chandrasekher believed the PC was about to undergo a similar evolution and would become just as ubiquitous. "Rather than one PC per household we should be thinking of one PC per person," he said.

Other industry trends such as the convergence of land-based and cellular voice and data networks were also working in Intel's favour.

"Over the next five years 70 per cent of voice traffic will be carried over the IP [internet protocol] backbone. It starts to look like the communications backbone in a corporate network."

Intel hopes this single, corporate-like data network will depend on servers running its Xeon and Itanium chips and will be accessed by personal devices using its Pentium 4 processor.

But while Intel looks almost unassailable at the high end of the processor market, it is facing increasing competition from manufacturers like Advanced Micro Devices (AMD) and Via Technologies at the lower end.

One manufacturer said sales of Pentium 4-based PCs had been disappointing, representing only about 5 to 7.5 per cent of sales. The same source said that despite price-cutting, Intel had sold only half the Pentium 4s it had originally forecast.

* Michael Foreman attended Computex as a guest of Intel.