Race toward 1GHz to headline 2000
By John Spooner, ZDNet
Dec 27, 1999

PC buyers looking for muscle machines next year won't be disappointed. But neither will those seeking low-cost PCs or even computing appliances.

The year 2000 should see higher-performance, lower-priced offerings in each of the three markets.

As has been the case in other years, personal computer performance will increase markedly over the next six to 12 months thanks to faster processors from Intel (Nasdaq: INTC) and Advanced Micro Devices Inc. (NYSE: AMD), and the widespread adoption of higher bandwidth memory technologies.

But Year 2000 will be different in at least one way: PC makers are poised to exchange the familiar beige PC box for smaller, sleeker, much less complicated PC designs. Their aim is to decrease costs and to make those PCs easier to set up and use for first-time buyers.

Specific-purpose computing appliance devices, expected to compliment PCs in the home, will also become more popular next year.

But as appliances come into their own, high-end PCs will be nearing their next important milestone in performance, the 1,000MHz mark.

"This time next year, we'll be shipping Willamette (the code name for a forthcoming high-end desktop PC processor), so we'll be well over 1GHz," said Pat Gelsinger, vice president and general manager of Intel's Desktop Products Group in an interview at November's Comdex/Fall.

AMD, however, might reach that milestone first. The company, which launched a 750MHz version of its Athlon PC processor in November, will continue to push the Athlon toward the 1GHz mark. An 800MHz version of the chip is due in early January. By the end of the second quarter the company expects to introduce a new version of Athlon with integrated Level 2 cache and an enhanced processor core. This core, code-named Thunderbird, is expected to carry AMD to the 1GHz mark.

Intel will ramp its 800MHz Pentium III into volume shipments in the first quarter of next year. The chip could possibly hit 1GHz in the late third or early fourth quarter. The Willamette chip will be introduced at about the same time.

Processors aren't the only area in which PC users should expect to see improvements. New memory technologies, which improve performance by feeding more data faster into today's high-performance processors, should begin to come into their own during 2000.

Thanks for the memory
Intel's next major chip set, called the 815 and code-named Solano, will add support for 133MHz Synchronous Dynamic RAM. At the present time, Intel supports only 100MHz SDRAM or Rambus memory technology. The 815 is due in the first quarter of next year, sources said.

The chip set, which will also offer an integrated graphic engine, will be aimed at midrange PCs. Because 133MHz SDRAM memory costs much less than Rambus memory, PCs using the 815 set will also cost less than high-end 820 chip set-based PCs with Rambus memory.

Otherwise known as Direct Rambus Dynamic RAM, Rambus memory technology uses a completely different architecture than SDRAM to offer bandwidth of up to 1.6GB per second -- double that which is now offered by 133MHz SDRAM. Rambus-based systems, however, are currently $300 to $400 more than a similar system with SDRAM, due to the additional cost of the newer memory technology.

Low-end rising
Analysts expect the low-end PC market to continue to grow in 2000.

While Intel Corp. was slow to embrace this market with its Celeron processor, losing a significant amount of market share to rival AMD, the company has rebounded with a slew of chips and aggressive pricing. But no one is counting AMD out; retail sales of Athlon-based systems are reportedly strong. AMD plans to ship one million Athlons by the end of this year.

Intel should begin shipping a new version of its Celeron chip, based on its 0.18 micron manufacturing technology, in the first half of the year. This chip will offer higher performance, starting at about 550MHz, and will support a faster system bus -- 1,000MHz. Intel, which is at 500MHz now on Celeron, may offer one more version of the current chip, a 533MHz with a 66MHz bus, first, sources said.

AMD is also regrouping its own low-end offerings. The company plans to debut improved versions of its K6-2 and K6-III processors in the first quarter of the new year. Called K6-2+ and K6-III+, the chips will be on AMD's 0.18 micron manufacturing process, which should improve yields of the chips and allow AMD to increase their clock speeds. The K6-2+ chip will also receive 128KB of integrated Level 2 cache, which should help boost its performance.

Low-cost versions of the Athlon chip, which utilize a lower-cost socket, called Socket A are also in the offing. These chips are not likely to show up, however, until late in 2000. AMD will maintain K6-2+ and K6-III+ at least through the third quarter, according to sources familiar with the company's plans.

The new battle for the low, low-end
While it battles with AMD in the low-end market, Intel is targeting an emerging market for sub-$600 PCs with a brand new chip. Code-named Timna, the processor will debut in the second half of next year. Timna promises to be a very low-cost chip for low-cost PCs and appliance devices. Intel says the chip should help lower the overall platform costs for PC makers, allowing them to build very low-cost PCs, but still maintain a profit margin.

Timna will balance on the line between low-cost PCs and appliances. Intel expects the chip to be used in both kinds of devices.

As has been the case in other years, personal computer performance will increase markedly over the next six to 12 months thanks to faster processors from Intel (Nasdaq: INTC) and Advanced Micro Devices Inc. (NYSE: AMD), and the widespread adoption of higher bandwidth memory technologies.

But Year 2000 will be different in at least one way: PC makers are poised to exchange the familiar beige PC box for smaller, sleeker, much less complicated PC designs. Their aim is to decrease costs and to make those PCs easier to set up and use for first-time buyers.

Specific-purpose computing appliance devices, expected to compliment PCs in the home, will also become more popular next year.

But as appliances come into their own, high-end PCs will be nearing their next important milestone in performance, the 1,000MHz mark.

"This time next year, we'll be shipping Willamette (the code name for a forthcoming high-end desktop PC processor), so we'll be well over 1GHz," said Pat Gelsinger, vice president and general manager of Intel's Desktop Products Group in an interview at November's Comdex/Fall.

AMD, however, might reach that milestone first. The company, which launched a 750MHz version of its Athlon PC processor in November, will continue to push the Athlon toward the 1GHz mark. An 800MHz version of the chip is due in early January. By the end of the second quarter the company expects to introduce a new version of Athlon with integrated Level 2 cache and an enhanced processor core. This core, code-named Thunderbird, is expected to carry AMD to the 1GHz mark.

Intel will ramp its 800MHz Pentium III into volume shipments in the first quarter of next year. The chip could possibly hit 1GHz in the late third or early fourth quarter. The Willamette chip will be introduced at about the same time.

Processors aren't the only area in which PC users should expect to see improvements. New memory technologies, which improve performance by feeding more data faster into today's high-performance processors, should begin to come into their own during 2000.

Thanks for the memory
Intel's next major chip set, called the 815 and code-named Solano, will add support for 133MHz Synchronous Dynamic RAM. At the present time, Intel supports only 100MHz SDRAM or Rambus memory technology. The 815 is due in the first quarter of next year, sources said.

The chip set, which will also offer an integrated graphic engine, will be aimed at midrange PCs. Because 133MHz SDRAM memory costs much less than Rambus memory, PCs using the 815 set will also cost less than high-end 820 chip set-based PCs with Rambus memory.

Otherwise known as Direct Rambus Dynamic RAM, Rambus memory technology uses a completely different architecture than SDRAM to offer bandwidth of up to 1.6GB per second -- double that which is now offered by 133MHz SDRAM. Rambus-based systems, however, are currently $300 to $400 more than a similar system with SDRAM, due to the additional cost of the newer memory technology.

Low-end rising
Analysts expect the low-end PC market to continue to grow in 2000.

While Intel Corp. was slow to embrace this market with its Celeron processor, losing a significant amount of market share to rival AMD, the company has rebounded with a slew of chips and aggressive pricing. But no one is counting AMD out; retail sales of Athlon-based systems are reportedly strong. AMD plans to ship one million Athlons by the end of this year.

Intel should begin shipping a new version of its Celeron chip, based on its 0.18 micron manufacturing technology, in the first half of the year. This chip will offer higher performance, starting at about 550MHz, and will support a faster system bus -- 1,000MHz. Intel, which is at 500MHz now on Celeron, may offer one more version of the current chip, a 533MHz with a 66MHz bus, first, sources said.

AMD is also regrouping its own low-end offerings. The company plans to debut improved versions of its K6-2 and K6-III processors in the first quarter of the new year. Called K6-2+ and K6-III+, the chips will be on AMD's 0.18 micron manufacturing process, which should improve yields of the chips and allow AMD to increase their clock speeds. The K6-2+ chip will also receive 128KB of integrated Level 2 cache, which should help boost its performance.

Low-cost versions of the Athlon chip, which utilize a lower-cost socket, called Socket A are also in the offing. These chips are not likely to show up, however, until late in 2000. AMD will maintain K6-2+ and K6-III+ at least through the third quarter, according to sources familiar with the company's plans.

The new battle for the low, low-end
While it battles with AMD in the low-end market, Intel is targeting an emerging market for sub-$600 PCs with a brand new chip. Code-named Timna, the processor will debut in the second half of next year. Timna promises to be a very low-cost chip for low-cost PCs and appliance devices. Intel says the chip should help lower the overall platform costs for PC makers, allowing them to build very low-cost PCs, but still maintain a profit margin.

Timna will balance on the line between low-cost PCs and appliances. Intel expects the chip to be used in both kinds of devices.

Intel isn't the only company targeting computing appliances in 2000. A host of competitors in the Internet appliance market are expected to begin shipping in the first quarter of the year.

Where PCs are general-purpose machines capable of a wide range of jobs, appliances will focus on a specific task such as accessing the Web. The appliance devices' advantage as compared to PCs, however, will be in cost and ease of use.

Computing appliances such as Netpliance Inc.'s i-opener will proliferate. The i-opener is a $199 Internet machine that allows users to dial in to an Internet service provider for access to the Web, e-mail, e-commerce and a host of content services such as entertainment news and weather. i-opener is aimed at users who may not be able to afford a PC, said CEO Kent Savage.

Even Microsoft Corp. (Nasdaq: MSFT), which has created its own Internet appliance called MSN Web Companion, is diving into the appliance business.

Don't count out the prospects of the PC, however.

Special-purpose boxes will gain sales volume, but will likely not take anything away from PC sales, said Roger Kay, director of the Desktop PC Practice for market researcher International Data Corp., of Framingham, Mass.

Instead, the PC will become something of a central hub, which connects other devices to each other and to the Web.

"The PC is still the only really viable hub for DSL or cable," Kay said. "The big move in 2000 in the consumer market is going to be to bring broadband (Internet service) into the home."

As a whole, PC makers are facing a slowdown in growth rates over the next two to three years. Where unit growth has been close to 20 percent over the past few years, rates are expected to slow to the low teens and later single digits as the PC market continues to mature, Kay added.

And don't forget wireless
Wireless technology will also grow in importance in 2000. Many PC companies, following the lead of Apple Computer Inc. (Nasdaq: AAPL), will add wireless local area networking technologies to both their corporate and consumer products. Wireless will be used to connect PCs to each other and to other devices. At the same time, appliance devices will utilize the connection to share data with the PC or to utilize the PCs broadband Internet connection.

See Also:
Intel drops Pentium bomb on AMD
The 1GHz race is on
Tech Poll: Will AMD or Intel create the first 1GHz chip?

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