Intel stumbles in race to market processors

Intel officials say only 'a small number' of early adopters are affected by problems found in the newly released 1.13GHz Pentium III processor.

As Intel applies damage control last week after two online hardware test sites found problems with the newly released 1.13GHz Pentium III processor, officials for the chip maker are quick to say that only "a small number" of early adopters are affected.

Still, the discovery that the Santa Clara, California-based chipmaker's fastest processor was failing in mid-flight prompted both IBM and Dell to stop taking orders for the 1.13GHz Intel chip, according to officials for both computer makers.

Dell, in Round Rock, Texas, had taken orders for PCs loaded with the processor since the chip's July 31 launch, says Dell spokesman Tom Kehoe. But Dell stopped taking orders for units with the bad chip and contacted customers, offering them the slower, 1GHz Intel Pentium III processor as a substitute.

Armonk, New York-based IBM pulled the option of the Intel 1.13GHz processor from its Web site after learning of the problem, says Tim Blair, a spokesman for IBM's personal systems group. Big Blue shipped some desktops with the chip, but sales so far have been limited, he says.

News of the problem came on the same day chip rival Advanced Micro Devices (AMD) began shipping its 1.1GHz Athlon processor. In the wake of the discovery, some analysts suggest Intel felt pressure to get the new chip out, as AMD already had a 1GHz chip on the market.

"We feel pressure to get every product out," explains Intel spokesman Howard High.

Intel has to balance pressures to get products to market while maintaining tough standards, which High says were illustrated by Intel's proactive effort to alert customers to problems with the 1.13GHz chip.

Nathan Brookwood, a principle analyst at Insight64, in Saratoga, California, says the 1.13GHz processor speed was pushing the limits of the Pentium III design. The way Brookwood sees it, Intel developed the chip as a public relations strategy to state that the company had the fastest chip.

Linley Gwennap, principal analyst at Linley Group, in Mountain View, California, agrees that Intel does indeed feel pressure to stay one up on Sunnyvale, California-based AMD and that Intel had a short turnaround time to get the 1.13GHz chip to market.

Fortunately for Intel, the problem was caught early. If the chip flaw had somehow gone unnoticed, a red-hot processor market would have rapidly moved the 1.13GHz Pentium III from the "enthusiast market" to the wider mainstream PC market, says Intel spokesman George Alfs.

Despite the public relations snafu of having to retool its fastest processor, Alfs says Intel has no plans to change the timing or the method in which the company announces and ships its future processors.

"We certainly are doing full compatibility-and system-testing each time, but how we launch our products often differs from launch to launch," Alfs says.

(James Evans, a Boston-based correspondent for the IDG News Service, an InfoWorld affiliate, and Tom Mainelli, an editor/reporter for PC World, contributed to this report.)

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