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Cyrix tries to match Intel

Cyrix is gearing up to beat Intel at its own game with a new strategy: build your own motherboards and systems to get your processors to market first.

Cyrix is gearing up to beat Intel at its own game with a new strategy copied directly from Intel's business model: build your own motherboards and systems to get your processors to market first.

Intel is beating its chip competitors in part because it doesn't wait until systems vendors adopt its technology--it builds the whole car, not just the engine. The strategy also serves to "suck up all the margins" out of the PC industry infrastructure, said Steve Tobak, a vice president at Cyrix.

Cyrix is tired of getting beaten. The company announced yesterday that it will build Cyrix-branded PCs in partnership with the EDS.

"Time-to-market is everything. We need to be able to offer the industry products in a timely manner," Tobak added.

To do that, Cyrix wants to mimic Intel and become a technology provider, creating a separate infrastructure that would produce chipsets and motherboards in competition with Intel's, Tobak said. Cyrix, SGS-Thomson Microelectronics, Advanced Micro Devices, and a group of motherboard and chipset vendors will form the core, Tobak said.

But analysts aren't so sure if Cyrix can pull it off.

"You'll always be able to use third-party boards and chipsets anyway. Besides, there are always going to be people who want to deal with Intel. [Cyrix] will be picking off customers around the edges," said Linley Gwennap, editor in chief of The Microprocessor Report in Sebastopol, California.

Gwennap added, however, that the plan may help the company secure its relationship with current customers, which include AST Research, Acer, and Epson.

But Cyrix says Intel's 1997 strategy for popularizing the Pentium Pro will be the catalyst for its assault because systems vendors will have to upgrade anyway and might take that as an opportunity to consider another vendor. "There's a lot of proprietary stuff in the [Pentium Pro architecture]. When Intel starts to market the Pentium Pro for the desktop, that's when Cyrix has to make a move [to establish its own technologies]," said Tobak.