Intel Officials Detail Corporate Strategies

NEW YORK (04/27/2000) - Intel Corp. courted the financial community in New York Thursday with a host of forward-looking statements about its many businesses, as well as glimpses at some forthcoming products.

Intel Chairman Andy Grove kicked off the day-long conference by characterizing Intel's current state as being "in the middle of a fairly sizeable strategic transformation." Intel essentially intends to put its chips along every step of the Internet, from PCs to data centers to handheld devices to network communications equipment.

"We have realized that the Internet runs on silicon, and our strategy is to follow the bits," Grove said.

Following up on that thought, Paul Otellini, executive vice president of the Intel Architecture Business Group, began his address by defending Intel's core business. Citing strong growth figures of as much as 20 percent as cited by IDC, Otellini refuted claims that the PC's days are numbered.

Otellini reviewed Intel's ongoing investments in new mobile processors, including a demonstration of a 500MHz Mobile Pentium III that operates at less than 1 watt of power, which Intel expects to ramp to 1GHz in the near future.

Intel hopes the chip will be ready this summer and will enable new and smaller form factors in full-featured mobile computing.

On the desktop side, Otellini detailed plans for a chip code-named Timna, a so-called "single-chip" solution based on the Celeron architecture. Set for release in the second half of this year, the chip is expected to run at 600MHz and enable PCs to be priced under $800. For high-end PCs, Intel plans to release the 32-bit Willamette chip at speeds of 1.4GHz later this year.

Intel officials also outlined the company's intentions to target both the communications and outsourcing marketplaces with two recently formed divisions, the Network Communications Group and the Communications Products Group. With a market as large as $14 billion in 2003, Intel is going after the ASP (application service provider), ISP, and Web-hosting data-center business. In addition, by accelerating the convergence of voice and data on the Internet, Intel believes that it can significantly enhance the use of and access to the Internet.

In the wireless market, Mark Christensen, vice president and general manager of Intel's wireless communications group, says that a $20 billion market by 2003 "translates into a boat load of silicon." Calling the wireless market, including handhelds, cell phones, and pagers, "the second largest consumer of silicon next to PCs," Christensen spoke of Intel's desire to deliver an optimized platform architecture that will drive standards. The three legs of Intel's wireless stool consist of its StrongARM processors, its cellular chip sets, and its compact flash cards, which will reach capacities of 64Mb later this year.

Intel CEO Craig Barrett wrapped up the day-long presentation by reaffirming Intel's commitment to building out its data-center strategy as part of its hosting division, Intel Online Services. Barrett hopes to see at least 10 data centers up and running by the end of this year, including new facilities in Korea, the United Kingdom, and Japan.

"Our intent is to have all of the bits on the Internet running on Intel," said Barrett in conclusion. "And that's exactly where we're headed."

Intel Corp., in Santa Clara, California, is at

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