Not only does the deal make Micron the first major PC vendor to adopt Intel's maiden 3D graphics chip effort as a standard component, but also the alliance is likely the first in a series of deals between computer makers and 3D graphic chipmakers to come during the second half of the year.
Escalating performance, combined with ever-declining prices, are prompting vendors to increasingly include 3D processors as standard equipment on their machines, said Peter Glaskowsky, graphics analyst with MicroDesign Resources.
But despite Intel's dominant position in the processor and chipset market--and the fact that the Intel740 remains one of the less-expensive high performance graphics accelerators on the market--the chip giant is not the only game in town when it comes to 3D graphics hardware. In fact, deals in the second half of this year may be dominated by companies such as Matrox and S3, which are on the verge of releasing new generations of accelerators.
"I would expect to see a few more deals [for Intel], but other vendors will have better products," Glaskowsky added.
An Intel spokeswoman said that the Micron deal is the first of a number of deals signed with computer vendors that will be announced in the near future.
Micron is incorporating the Real 3D Starfighter graphics board into its Millennia 350 and 400 computers. The Intel740 is the graphics chip at the heart of the board. Until now, Micron offered the Starfighter card as a $49 option on the Millennia 350 and 400, said a spokesman for Real 3D, but the card now comes as a standard piece of equipment.
The release of the Intel740 (informally called the i740) stands as one of the central issues in the graphics chip arena this year. While not as powerful as the top 3D graphics chips on the market today, it comes close, according to a number of analysts. At the same time, Intel's manufacturing and marketing might has created the possibility that Intel will be able to undercut independent vendors on price.
Interestingly enough, the Intel740 sells for relatively low prices and appears to be in abundant supply. Still, other graphics chip vendors have been able to stay ahead of the curve with newer technology. (Intel is an investor in CNET: The Computer Network).
The effects of price pressures already seem to be in full swing. Last month, John Latta, an analyst with 4th Wave, said that the chip was available for $8 to $18 in Taiwan--far below its posted wholesale price--because of a huge product surfeit for the chip there. Glaskowsky added that add-on cards that incorporate the chip are available for close to $70 in U.S. retail outlets, which means that Intel is selling the chip for around $20.
Despite the pricing, however, the chip has yet to find its way into many mainstream computers. CompUSA is the only other vendor that has adopted the Starfighter board into its computers, said the Real 3D spokesman.
Interest in the second half of the year could be concentrated on the Matrox G200 and the S3 Savage 3D, according to Glaskowsky, and the two are expected to perform better than the Intel740. Intel has indicated that it may come out with an enhanced version of the chip, but plans are still sketchy.