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Intel launches new graphics effort

Although the company's foray into graphics chips last year floundered, it is getting back in the game with a series of 3D PC processors that could make it a major force in graphics.

Intel is tanned, rested, and ready for another assault on the graphics chip industry.

Although last year's foray into graphics chips floundered, Intel is getting back into the highly competitive market with a series of 3D PC processors that observers say could help the company become a major force in graphics.

The company yesterday announced the 810, a PC chipset with integrated graphics, audio, and other functions for budget PCs which will ship in June. Today, at a developer conference in Shanghai, the company announced the i752, a standalone version of the graphics engine that comes with the 810 for standard PCs.

Later this year, Intel will release the i754, a higher-performance graphics chip for performance PCs, said sources.

In addition, the company is working on initiatives with companies such as Evans and Sutherland. Intel has also yet to release "Mont Blanc," a code name for a notebook graphics chip that is evolving from the technology the company acquired when it bought Chips and Technologies.

What makes these chipset plans different from 1998?

Intel is aiming at broader segments of the PC market, not just the rapidly changing performance segment, and will tout integration and compatibility with other Intel chips to leverage sales in graphics, according to observers. Intel has also consolidated some engineering efforts. The thinking, in other words, has seemingly become a little more long term.

"Intel is getting a little smarter. They are learning from their mistake," said Kathleen Maher, an analyst at Jon Peddie and Associates, a Tiburon, California-based consulting group.

The company's attitude is more: "By 2000 we will be beating our chests," she said.

The graphics strategy will also help the company fend off challenges in the low end.

"They are clearly taking a low profit on this part [the 810]. They are doing it to hurt AMD and Cyrix," said Peter Glaskowsky, analyst at MicroDesign Resources, who noted that a similar chipset without graphics from Intel actually costs more than the 810. Glaskowksky termed the graphics performance of both the 810 and the i752 "mediocre."

The difference between the effort now and last year's pitch in many ways comes down to ambition. Last February, Intel touted its i740, its first commercially marketed graphics chip, as a performance part. The stated wholesale price for the chip was $34.50, relatively high for a 3D graphics part.

Unfortunately for Intel, the i740 was soon surpassed in performance by chips from other vendors, making it an expensive underachiever, according to many. Few U.S. computer vendors picked up the chip. By June, Taiwanese distributors and dealers were selling the chip for prices well below the wholesale price.

By contrast, the 810 chipset and the i752 come to market with fairly modest expectations. The 810 chipset will be used in budget PCs selling for less than $1,000. Although the graphics provided by the 810 surpass what Intel achieved with the i740, the company is equally talkative about how the chipset will cut costs.

The 810 will lead to "about a 20-percent reduction in the motherboard bill of materials. In the low-end, price and costs are paramount," said Paul Otellini, general manager of the Intel Architecture Business Group.

The reductions will lead to between $50 to $100 reductions in PC retail prices, he added.

To serve all budgets, Intel will come out with three different versions of the 810 to suit different capabilities and budgets.

Further, the 810 will ease the adoption of other technologies in the low end, according to Ron Peck, director of platform marketing at Intel. The chipset allows PCs to run DVD drives through software, which means that it becomes cheaper to incorporate DVD into budget PCs. Audio functions can also be run on software, rather than through another discrete piece of silicon.

The chipset additionally comes with a Random Number Generator, a key component for encrypting electronic transactions. Applications that take advantage of this function will begin to appear in the second half of this year.

Similar to the 810, the pitch will be on price as well as performance, said Peddie's Maher.

"The i752 is good, it's solid, it's price will be fine. It's like the next-generation i740, but this time they got it right," she said. The chip will sell in wholesale for around $19 dollars, less than a third off the initial i740 price.

But, like the i740, the i752 will come to market with performance drawbacks. It is by no means a great chip. It compares with the standard 3D chips on the market today and once again will be surpassed by products coming from a variety of vendors in June.

Future products will also benefit from internal reorganization, she added. Driver development for these products has been consolidated. In addition, Intel will also be able to tout better compatibility with the Pentium III. Intel, she said, will claim "it leverages SIMD [the additional instructions with the Pentium III] like no one else."