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Tech Industry

Intel inside out

Much to Intel's dismay, the chips have hit the proverbial fan.

Much to Intel's dismay, the chips have hit the proverbial fan.

Despite the oft-flogged "P" word, even the ever-paranoid Andy Grove and the rest of Intel must have been feeling pretty smug with the release of Pentium II.

The combination of Moore's Law and a radical pin design was supposed to have defused the competitive zeal of perennial Intel heel-nippers AMD and Cyrix. No more room to easily clone the Pentium II, no more threat of "them" catching up.

Or so Intel thought.

Instead, the chip giant has been bamboozled by a category now known as "the sub-$1,000 phenomenon." The drive toward the latest, greatest, fastest machine appears to have reversed course. What sweet revenge for the lesser chipmakers long dismissed as bottom feeders.

Intel's modus operandi had been to force the market to move continually toward its "next-generation" processors and leave the stragglers to wallow in the "old" technology peddled by the AMDs and the Cyrixes of the chipmaking world--the 486, the Pentium 100, the Pentium MMX, etc.

At prices from $799 to $999, PC buyers don't seem to mind buying boxes without the vaunted "Intel Inside" imprimatur. Thanks to Moore's Law, the speed is about right, and the price definitely so.

The home consumers snatching up the sub-$1,000 PCs are absolute proof that you don't need a tank when a BB gun will suffice.

In addition, as indicated in our story Wednesday, it seems that even corporate PC buyers--the ones with deep pockets--are coming to their senses and not whipping out their checkbooks to buy the latest, fastest, biggest computer. Could it be that they are, at long last, letting their brains and not their machismo dictate purchasing decisions?

Whatever the case, the upgraditis that has marked the '90s seems to be subsiding, and not just in the PC space. After all, it was these same corporate purchasing managers who decided--to the tune of some 60 percent--to stick with Windows 3.1 when Microsoft was wooing them to move to Windows 95 with a multimillion-dollar marketing campaign wryly punctuated with "Start Me Up" by the Rolling Stones.

On the other hand, the hype over the network computer appears to have contributed mightily to this march toward sense and sensibilities on the part of Intel and Microsoft. Never mind that the NC is being dubbed everything from Not Compatible to Not Clear to Not Coming. The fact is that the PC camp woke up to the perceived threat of cheaper computing devices that also promised to lessen the hassle--and the cost--of administering a personal computer. Their fear was that unless they responded to this NC threat to their hegemony, they could be in dire straits. Ergo, the $1,000-and-under personal computer.

Little wonder that Intel is suddenly laying out plans for $500 computers. Little wonder too that Bill Gates has been espousing causes bearing such labels as "simplicity," "zero administration," and "total cost of ownership."

This is a good thing. Accede to consumer demands or even the paranoid won't survive.