The week in review: Intel moves decisively

At the end of a year which featured a federal antitrust settlement, Intel has been moving decisively to preserve its commanding lead in the processor industry.

5 min read
Closing a year which featured the settlement of a federal antitrust case, several product delays, and increased pressure from competitors, Intel moved decisively to reassert its lead in the processor industry.

The chipmaking giant released two Pentium III processors ahead of its original schedule, reacting to the recent momentum of rival Advanced Micro Devices, and set plans to accelerate its product schedule for 2000. Additionally, Intel reorganized itself to create a division for wireless products, to better tap into one of technology's hottest sectors.

Monday, Intel unveiled 750- and 800-MHz versions of the Pentium III to reclaim the PC processor speed crown from AMD. The advanced release wasn't an unqualified success, however. Few of the new chips, originally scheduled for delivery in the first quarter of 2000, have been shipped to PC makers, meaning consumers won't see many top-speed systems until next year.

The lead may also be tenuous, as AMD is expected to come out with an 800-MHz Athlon early next month.

Intel's accelerated "road map" for 2000 calls for introducing 850- and 866-MHz Pentium IIIs in the year's first quarter, and a landmark 1-GHz Pentium III in the fourth quarter. Celeron, the processor for budget computers, will rise to speeds of 633 MHz. A processor with integrated graphics capabilities, code-named Timna, will debut at the end of the third quarter at 600 MHz.

Meanwhile, the new Wireless Communications and Computing Group will manufacture and design flash memory and digital signal processors, used in cell phones and other appliances. Intel has made some of these types of chips for years, but organizing these into a unified group is intended to concentrate resources in a more coherent manner. Acquisitions are likely. Intel is currently in the midst of a push to diversify beyond its traditional base of PC and server microprocessors and sell more products into markets such as communications.

Green light
In a move that further opens the telecommunications market to competition, federal regulators gave Bell Atlantic the green light to offer long-distance service in New York. It's the first time that a big local phone company has won approval to offer long-distance service within its local territory, and allows the Baby Bell to compete head-to-head with telecommunications giants AT&T, MCI WorldCom and Sprint.

Microsoft chief financial officer Greg Maffei resigned to become chief executive of Worldwide Fiber, a privately held firm that specializes in building fiber optic networks. Widely recruited in the technology industry this year, Maffei was previously said to be a candidate for senior positions at Time Warner's Road Runner and Apple Computer. His departure apparently reflects his desire for a new challenge, but didn't much faze Microsoft investors.

John Elway, Michael Jordan and Wayne Gretzky took over the e-tail sporting goods business of SportsLine.com, leaving SportsLine to concentrate on its media arm. MVP.com signed an exclusive, 10-year, $120-million marketing arrangement with SportsLine in exchange for an equity interest, and formed an alliance with CBS for the network to provide $85 million in advertising and promotions over four years, again in exchange for equity. Benchmark Capital and Freeman Spogli also agreed to provide more than $65 million in financial backing. Especially as CBS already has a similar relationship with SportsLine, the move highlights the continued blurring of lines between new media companies and e-commerce players.

Red light
As Compaq prepares for the January launch of a newfangled business system, there are growing signs the computer maker isn't ready to implement direct sales of the iPaq. The shortcoming may account for rumors that Compaq is in talks to buy assembly and manufacturing facilities from distributor Inacom. Compaq has been trying to adopt the direct model for years with mixed results, because it has not had adequate logistical systems. The miniaturized, modernized iPaq, which will begin at $499, is at the center of Compaq's revitalization strategy.

3Com reported that second-quarter sales declined and earnings for next quarter could fall below current expectations. While sales of its PalmPilot handheld devices leapt, core networking equipment sales--hubs, switches and routers--fell 12 percent. The drop is alarming as the company will need to count on the latter to grow when it spins off its Palm Computing division.

Hewlett-Packard has quietly stepped up efforts to make Linux compatible with its most powerful processors, retaining a Linux consultancy to ensure the increasingly popular operating system runs on its advanced, 64-bit PA-RISC chips by the first half of next year. The move indicates HP wants Linux to play a greater role in its future products, and is another sign that the open-source software has become a staple menu item in the world of corporate computing.

Which way?
America Online agreed to acquire online map and navigation provider MapQuest in a stock deal worth $1.1 billion. Some 4 million use the service. The move appears to further the "AOL Anywhere" strategy by giving the online giant the ability to provide maps and directions to smart phones, PalmPilots and other non-PC devices.

Microsoft moved to expand its share of the streaming media market by taking a $30 million stake in Net streaming pioneer Intervu. The investment allows Microsoft, which has been challenging leader RealNetworks, to bring its Media Player software to a larger number of media content companies.

Palm will release its first device with a color display early next year. But the much-anticipated Palm IIIc, which will coincide with its IPO, deviates from its strategy of keeping devices as simple as possible, even at the expense of cooler features. Color displays are far more complex than black-and-white screens.

Also of note
AOL said it has signed more than 20 million members to its online service, having topped 19 million in October ? Qualcomm agreed to sell its mobile phone manufacturing division to Japanese handset maker Kyocera Corporation for an undisclosed sum, clearing the way for Qualcomm to focus on its more profitable businesses ? A coalition of professional sports leagues sued a Canadian businessman under the new cybersquatting law, accusing him of unlawfully hawking such email addresses as rangers1.com and yankees1.com ? Half.com, based in Philadelphia, has persuaded the city council in Halfway, Ore., to rename the 360-person town after the e-commerce site, which will officially launch next year.