CPUs: Faster And Better

For CPU makers, the past year was full of technological innovations, new launches and a slew of price cuts. Intel continued to set the trend for this. 

AMD, despite its limited marketing muscle, was not far behind. It tried to keep pace with Intel in launching faster processors, albeit a little slowly.

During the year, Intel took a giant step forward by launching the fastest desktop processor (P4 3.06 GHz), leaving the competition way behind. “In terms of speed and performance we are ahead by miles,” says Amar Babu, GM-Channels (South Asia), Intel Asia. 

	HIGHLIGHTS OF 2002-03 l  CPU vendors claimed consistent supply. But, the market was plagued by frequent price fluctuations due to shortages. A lot of gray supplies also affected prices. l  Entry of newer models brought down the cost of entry-level CPUs. Pentium-4 1.7 and 2.0 GHz ruled the market. Though, by end of the year, these were replaced by 1.8 and 2.4 GHz. l  Intel and AMD continued reducing prices reqularly. l  Intel debuted first P4 with HyperThreading, and launched Centrino for mobile computing. l  Vendors had a tough time tracking gray imports. Intel strengthened its efforts to track the culprits. However, company officials admitted they were having difficulty eradicating grays altogether. High duties were blamed for this.

HYPE ABOUT HYPERTHREADING

Intel introduced the HyperThreading technology in Pentium-4 and launched the Centrino for mobile platform. The Centrino, which is a combination of the mobile Pentium processor, the chipset and wireless technology, was introduced keeping the laptop market in mind. 

In 64-bit computing, Intel launched its Itanium-2 processor. But the company had to face a setback in performance level while operating in 32-bit applications. 

In a smart move, AMD made the most of this setback by launching Opteron, a 64-bit processor in x86 family with complete backward integration for 32-bit computing. 

Justifying Itanium-2's technological superiority over Opteron, Amar of Intel explains, “Itanium is not an x86 architecture, but a complete 64-bit processor which handles everything in this environment and hence will work best only on 64-bit applications.

There are some 20-odd Itanium users in India and they are happy with it.”

AMD, on the other hand, is targeting the 1- to 8-way server market and 1- to 4-way workstation market, with its
Opteron.

“We believe that our approach to 64-bit computing is most pragmatic as it allows enterprises to run 32-bit applications without additional investments and seamlessly migrate to 64 bit applications,” says Sanjeev Keskar, Country Manager, AMD.

The desktop version of Opteron is expected to hit the Indian market in September 2003.

INTEL DOMINATES

In the entry-level market, like every other year, Intel dominated the CPU business with its Pentium 4 - the most popular of it being the 1.7 GHz model. And in the low-end range, Celeron 1.7 GHz was most sought after.

Intel slowly phased out the 1.7 GHz by the end of the year and brought in the 1.8 GHz as the entry-level model in the P4 segment. In higher models, the trend moved from 2.0 GHz to 2.4 GHz.

AMD did reasonably well with its Athlon 2100XP last year. It also launched Athlon XP 2800+ and 3000+ for customers seeking high performance in graphics and gaming.

While Intel continued to launch several processor models throughout the year, sales of 1.7 GHz and 2.0 GHz models were high. By the end of the year, sales of 1.8 GHz and 2.4 GHz started picking up too.

Says Amar, “Intel remains competitive by providing the best technology available at the best possible price. The reason why we have to keep moving on gigahertz and technology fronts is to tell customers that Intel has the best technology product at comfortable price points.” This is why Intel still has the Celeron for price-conscious buyers, he adds.

The volume products in Celeron are 1.7 GHz and 2 GHz and in P4 it is the 1.8 GHz and 2.4 GHz. “At the same time we sell the 3.06 GHz-model to people who need it for specific needs. The volumes are low in this case and obviously you won't see it in the market as a visible product,” Amar states. 

PRICE FLUCTUATIONS

Price fluctuations were one of the key aspects of last year. SI could be found monitoring daily to give the best quotations to their customers. However, Intel denies any price fluctuations in the last one year.

“We have a uniform pricing worldwide, and price cuts are announced as per our roadmaps. There was no price fluctuation due to short-supply of CPUs, as there was never a shortage from our end,” says
Amar.

So does that mean the shortages that plagued the country was caused by distributors and dealers? “Well, there could be a price fluctuation because of the logistics, but not because of supply,” admits
Amar.

Availability during transition from a particular speed to another is always an issue. For example, when 1.7GHz is phased out and 1.8 GHz takes over, the market is unable to meet the demand for 1.7GHz and this shortage gives rise to price inflation. “But such price hikes are short-lived,” comments
Amar.

While, Intel attributes market logistics as a possible cause for shortage and price fluctuation, AMD officials claimed that there was no such problem for their processors.

HAMPERED BY PARALLEL IMPORTS

Parallel imports is a dominant feature of the CPU market. Intel blame the country's high duty structure for the existence of grays. Says Amar, “The government has to realize that the by reducing the duties they will get more legal sales.”

Addressing such a bureaucratic problem is difficult for the company. That is why Intel is focusing its attention on educating partners instead. “We ask them to ensure they are buying the genuine product, since we support partners who are buying only through our official channel. We also randomly track the numbers that come through gray source,” informs
Amar.

Grays are mostly remarked or repacked tray products. “It will still remain an Intel processor, but customers are not getting the value-adds that they are paying for,” adds he.

For AMD, the gray market has ceased to be a major concern after the introduction of their box processors in the market.

SEGMENT-WISE PROMOTIONS

Intel has a number of ongoing promotions like the Digital Party and mobile GIDs (a van that goes around the country). Most of its promotions are now targeted at the SMB market, where there is scope of giving buyers complete solutions, that are segment-specific. 

“We are trying to work with ISVs who provide these solutions, matchmake them with our partners and both of them go to market together,” explains
Amar.

Intel has also strengthened focus on the education segment. “We have come up with some programs for the home segment adding on educational content like the class syllabus and other stuff that parents can use for their children,” informs
Amar.

AMD too is going strong with schemes and promotions like the AMD Reseller Rewards program and Fax and Win promotion for small resellers. Says Sanjeev, “We also run numerous co-marketing activities with our distributors.”

Following the launch of its Opteron, AMD is now focusing on the whitebox server market. “We are running a 11-city tech training seminar series as part of this effort,” reveals
Sanjeev.

The year ahead will see the CPU market moving onto newer technologies and regular price cuts. Channels can look forward to better business with both Intel and AMD going full steam on channel activities. 

NELSON JOHNY 

with inputs from MOHIT CHHABRA

“We do sell motherboards, but concentrate more on integrating our chipset on other vendors' boards”

Amar Babu, GM - Channels, South Asia, Intel Asia Electronics Inc.

Over 80% of the motherboards have Intel chipsets on them. So it is but obvious for Intel to maintain a low profile when it comes to selling their own motherboards. The company would rather help other players bring motherboards with Intel chipsets on them. In an exclusive interview with DQCI, Amar talks about Intel's strategy in the motherboard segment. 

How has Intel positioned itself in the motherboard market in India?

Intel has positioned itself in two different ways in the motherboard business–as a motherboard supplier and as a supplier of chipsets to motherboard-makers. 

Our focus is primarily on the chipset business. Of course we do sell motherboards, but we concentrate more on working with other vendors in integrating our chipset on their boards. 

We have been continuously launching various chipsets with different technological enhancement like the 845, 850 and now the 865. We have consistently provided all kinds of solutions for different memory technologies, be it DDR, SDRAM or
RDRAM. 

Right now, bulk of the models are moving towards DDR-based boards on Pentium 4 processors. In the same family we also have a low-cost version for Celeron processors. With these kinds of product offerings, Intel's marketshare has definitely gone up considerably.

How was Intel's performance in the motherboard segment in the last financial year?

GLLY and GLAD are two motherboard versions from Intel that were very popular in the market last fiscal. GLLY boards are based on the GL version of 845 chipset. Similarly GLAD is another variation in the same family. However, motherboards based on the 845GEVV2 (533 FSB) and 845GEVAD2 (533 FSB) chipsets are the two new models that have picked up lately in the market. 

More and more people realize that there is a performance value plus quality that is attached to Intel products

Overall, the motherboard business has grown significantly for Intel. The company witnessed nearly 100% revenue growth in FY 2002-03 over FY 2001-02 for motherboards. Despite the fact that our boards are a little expensive, volumes have grown. 

However, we are still small with respect to the overall market. But the fact is that more and more people now realize that there is a performance value plus quality that is attached to Intel products.

What was Intel's marketshare for motherboards during 2002-03?

We are not a volume player in the motherboard business. Our goal is to provide superior models enabling users to make technology transition. This means that we will be the first ones to have a board with latest options for customers. Intel makes sure that the motherboard is launched before the CPU and that the boards are well-available in the market.

However, our focus is on selling chipsets. Our motherboard business is something which supports our CPU business, supports our technology transition and serves as a reference platform for performance. We don't want to compete with our own customers.

Intel motherboards are usually more expensive than other brands. Why?

Intel's objective is to primarily support technology transition and also to provide various high-end performance features. So, naturally we are a little more expensive than the others. But then again, we are not in the volume market. We operate in the high-end space of the market. We enjoy a good brand recognition there and that is where we will continue to remain.

What is the company's strategy on the server board front?

For the server board, our strategy is very different. We want to be a complete building block supplier on the server front.

Unlike motherboards, server boards need a lot more technology and integration. There are also not many players who are actually dealing in server boards as a serious business. 

For server boards, the chipsets are different, there are support requirements for RAIDs, SCSI, hotplugs, chassis and so on.

So we provide all the building blocks in the case of server. Customer can build a server using our building blocks. Since building a server is a little more technical, we also offer a completely different set of training programs for this.

Which motherboard brand, according to you, is the most popular in the country?

The Indian motherboard market is flooded with a large number of local and MNC brands. But, I guess, Kobian with its Mercury brand has done quite well here. Then there are other brands like D-Link-Gigabyte, Vesta, Asus, MSI, besides Intel who are doing reasonably well.

There are some local motherboard manufacturers in India. To what extent do you think will these brands succeed?

These local manufacturers are competing against the volume economics of Taiwanese players. Taiwanese manufacturers stand above rest by supplying to more than half of the world. I think, unless you have a good kit supplier, it is not feasible to manufacture locally.

NELSON JOHNY

Popular PROCESSORS reviewed

Intel’s P4 2.4 GHz

The processor from Intel boasts of another 200 MHz compared to its predecessor, the P4 2.2 GHz. Based on the Northwood core, it has 8 KB and 512 KB of L1 and L2 cache respectively. It is based on a 0.13 micron manufacturing process, fits on Socket 478 and has approximately 55 million transistors.

Other contemporaries, which can be considered competition to this processor are its sibling, the 2.2 GHz, and two Athlon XPs, 1900+ and 2100+. The 2.4 GHz convincingly takes the performance crown from all these processors in almost all benchmarks. The only two benchmarks where the Athlon XP outperforms it are Serious Sam and MP3 encoding, and that too by a small margin.

Intel P4 3.06 GHz

This model of the P4 family is special from the rest in that it is the first desktop processor to feature Hyperthreading. All the other features are the same as previous processors, and the performance gain is also what would be expected from the increase in clock speed. Thus our main emphasis in this article is on HT, since it will be incorporated in all new processors.

Both OS and application need to be HT-enabled to properly take advantage of it. This means that older OSs like Win 9x go right out of the window, and only modern ones like Linux and Win 2K/XP can be considered. HT will give a big boost for applications that are written for it. HyperThreading’s success depends on developers using it.

AMD Athlon XP 2100+

This is AMD’s processor featuring the Palomino core used in all XP processors till now. All new CPUs from XP 2200+ onwards will be based on the Thoroughbred core, (0.13-micron manufacturing process). The only novelty in the Athlon XP 2100+ is an additional 67 MHz compared to XP 2000’s.

It seems to be getting a tough competition from Intel P4 2.4 GHz. The P4 is ahead by a very small margin in some of the benchmarks, namely 3DMark 2001, Business and Content Creation Winstone 2001. As far as DivX encoding and Quake 3 Arena results go, the P4 is ahead by a wide margin, while the Athlon 2100 is ahead in Serious Sam and MP3 encoding by a small margin.

The XP 2100+ is good for those wanting to squeeze out every ounce of performance they can from their processor. So if you need a fast processor in a hurry, the XP 2100+ is a good choice.

AMD Athlon XP 3000+ & 2800+

The new Athlon XP 3000+ is based on a new core called Barton, which has 512 KB L2 cache memory. The 2800+ is based on the Thoroughbred-B core with 256 KB L2 cache. Interestingly, the 3000+ runs at 2.167 GHz, while the 2800+ runs faster at 2.25 GHz. But the larger cache gives the 3000+ a slight edge over the 2800+. The 2800+ also has a Barton core version with 512 KB L2 cache and operates at 2.083 GHz.

We compared the processors with a P4 3.06 GHz processor on an Intel D850MV board with 512 MB of PC-1066
RDRM.

There was a neck-to-neck competition between the P4 and 3000+, and the 2800+ was not too far behind either. In applications like Photoshop and Soundforge, the 3000+ performed slightly better than the P4, as shown by CCW 2001.

Both the Athlon processors operate at lower clock frequencies than the P4; yet their performance is more or less the same as that of P4.