Frankly, I’m exhausted by the whole thing.
It’s all kind of like running a footrace uphill-I run 60 megahertz; you counter by running 66 megahertz. Then along comes this guy from behind, and he’s running 70 megahertz! Right behind him is Mr. 90 megahertz, and down at the bottom of the hill, lo and behold, is Ms. 150 megahertz, tying on her track shoes.
Welcome to the Microprocessor Wars, Ver. 1995.0.
You get fast, we get faster. You get faster still, we buy an ad saying how fast we really are. Pretty soon, it’s like the war scenes from the “Terminator” movies: Huge, treaded microprocessors grinding over a nuclear bomb-blasted landscape, exchanging laser fire and seeing who can run Adobe Photoshop the fastest.
“OK, there is something to the idea that the user doesn’t see microprocessors in the same way as, say, the computer press,” said Eric Wee, senior public relations manager for the PowerPC line at Apple Computer Inc. in Cupertino, Calif.
“A user’s relationship doesn’t have anything to do with whether the computer runs at 66MHz or 90MHz, or whether this is a PowerPC or a Pentium machine. It has to do with, `How does this computer help me do my job better?’ “
Yes, but here are the main combatants:
In corner No. 1, Intel Corp.’s Pentium chip, a big, bad Transformer-type dude.
The Pentium is the successor to Santa Clara, Calif.-based Intel’s wildly successful X86 series of chips, which have powered IBM personal computers and compatibles since the beginning of the industry. Originally designed for high-end PCs, Intel’s aggressive pricing policies have turned the Pentium into the monster it is, slashing, bashing and crushing its way from the high-end, through the business-oriented middle price ranges, right into the low-end (cheap) home computers.
In corner No. 2 is a smaller, but rapidly growing, Godzilla, the PowerPC chip, an all-new platform created by the unlikely alliance of former enemies Apple and International Business Machines Corp., along with chipmeister Motorola Inc. in Schaumburg.
Imagine the PowerPC as one of those organic Japanese monsters-it’s cute when it’s little, but you know it has to bulk up before it goes mano-a-mano with the Transformer.
A host of other players have gathered in the other corners of the ring. There are aggressive manufacturers of PC-compatible chips such as NexGen Microsystems Inc. (Milpitas, Calif.), Advanced Micro Devices Inc. (Sunnyvale, Calif.) and even venerable Texas Instruments Inc. (Dallas). And then there’s Digital Equipment Corp. (Maynard, Mass.) and its Alpha series of high-performance chips, including its recently announced “fastest microprocessor on the planet,” the Alpha AXP 21164.
Sort of like all those little mammals scurrying beneath the claws of the reptile giants.
“War is the correct word,” said Dominic Ricchetti of Dataquest Group, a computer-research organization in San Jose, Calif. Ricchetti’s title is Director of Advanced Desktops Worldwide, a position that’s given him a front-row seat in the battle.
“A friend of mine called the other day to say his grandmother was buying a computer, and the only thing that she insisted on was `Intel Inside,’ ” he related. “She didn’t know the difference between a Macintosh or an IBM, but she knew about Intel. That’s how far down the microprocessor war reaches.”
Here, briefly, is a synopsis of the genesis of the war, who holds the high ground-and what it means to you, the non-combatants:
Intel holds about 86 percent of the personal computer microprocessor marketplace, said Michael Slater of the Microprocessor Report, a Sebastapol, Calif.-based newsletter that keeps tabs on the bloodletting.
It gained the high ground through being the right product at the right place at the right time-the microprocessor “brain” chip for the fledgling IBM PC back When Dinosaurs Ruled The Earth, a.k.a. the early 1980s. The huge success of the IBM PC and its clones mean that Intel had an overwhelming lead in locking in the market.
As more and more powerful chips-and machines-became available, the critical issue became “compatibility”: Would the newer, more powerful computers run the huge existing base of software? Well, they would if they had “Intel Inside.” Intel kept progressively introducing faster and faster microprocessors for IBM compatibles, and the market kept eating them up.
What changed was the first serious threat to Intel’s high ground, a chip produced in 1993 by the IBM/Apple/Motorola alliance.
The PowerPC has a number of advantages over the Intel product, not the least of which is that it’s less expensive. Apple was first into the consumer market with three PowerPC boxes (at substantially lower price points than traditional Apple products, which have occupied the high end). The new machines have taken off and are selling well.
“By the end of the third fiscal quarter,” Wee said, “we will have sold 340,000 units since their introduction on March 14. The plan was to sell 1 million units within a year after introduction, and we’re on track with that.”
Apple expects that sales rate to increase as more and more programs optimized for the PowerPC become available.
“The PowerPC platform shows a lot of potential-especially in its ability to run DOS/Windows programs, although it’s slower than a DOS/Windows machine,” Dataquest’s Ricchetti added. “But for the architecture to really be successful, IBM needs to hit the streets and be successful.”
There are trouble signs, though. IBM is poised to introduce a PowerPC machine this month, but the PowerPC version of its OS/2 operating system won’t be ready until mid-1995. So the machine will ship with a version of Windows NT and a version of Unix-neither of which will appeal to the vast market of PC users.
“If IBM were to announce a PowerPC-based desktop without a major operating system, we feel that product would be destined to fail,” Randy Gisuto told InfoWeek, an industry newspaper, recently. Gisuto is an analyst for BIS Strategic Systems, a market research firm in Norwell, Mass.
That followed a New York Times report that the IBM/Apple/Motorola alliance was faltering, with major players IBM and Apple headed in divergent directions-away from the commitment to produce one platform that would run IBM and Apple software.
Nor has the Intel Transformer-creature quietly folded up into itself. Beginning in late 1993 Intel began a series of price cuts on the Pentium chip while rapidly feeding faster and faster chips into the market.
How much of a price cut? Originally, 60MHz Pentium chips were close to $850, versus about $460 for a similarly speedy PowerPC. By July, the price was $570 (there has been no significant price change for the PowerPC). And by November, industry observers are predicting a drop to $385.
According to industry publication PC Week, Intel upped the ante this year by tossing $150 million into advertising, designed to make everyone-and, quite literally, his grandmother-aware of the Pentium and Intel.
“I think the battle is over,” said Howard High, an Intel spokesman. “Market share isn’t going to change. We went from shipping in the hundreds of thousands of Pentiums to shipping 6 million to 7 million in 1994.
“Let’s say Apple ships a million PowerPCs. We hold our respective market shares.”
So what about those little mammals out there, crawling around under the claws and treads?
“I think the transitional opportunity has come and gone,” High said. “Now they have to wait for the next window to open.”
“Without doubt, Pentium will be the volume leader,” Dataquest’s Ricchetti noted, “but essentially every microprocessor innovator is going after a piece of Intel’s market. Primarily, the other microprocessor vendors are trying to achieve enough performance advantage over Pentium to attract people to switch.
“The RISC (reduced instruction-set computing) processors are delivering significantly higher performance, but without Intel’s volume and control of the market it is difficult to have competitive pricing.
“Still, the RISC microprocessors will gradually ramp up volume in the PC market in 1995 and begin to gain share from Intel starting in 1997,” Ricchetti predicted. “If all the technically innovative Davids keep banging away, the Intel Goliath will lose some battles.
“The introduction of Pentium and Windows NT created opportunities for market shares to shift, and even though no significant change was apparent, Dataquest sees many more opportunities over the next two years.”
“This is an unbelievable time for people who are buying computers,” said Chuck May, director of marketing for clonemaker VTech in Lake Zurich.
Because the microprocessor is any system’s key price element, more power becomes available for less and less as the price of the microprocessor shrinks, he noted.
“We’re looking at entry-level Pentium systems in the $1,700 range by early next year,” he said. (Several direct sellers, including Dell Computer Corp., Austin, Texas, and VTech, are at $2,000, which long has been considered the entry-level barrier.)
“The customers benefit. Intel benefits. Microsoft benefits,” May added. “Everybody benefits but the manufacturer, and we’re getting killed.”
