Intel's empire spreads south

Microprocessor juggernaut Intel plans to open its new Auckland-based New Zealand office in July in the midst of a blizzard of launches around the Asia-Pacific region. It has been a busy period for Intel, which has set up subsidiaries in six countries in South Asia in the past 12 months and will open in another two to three countries this year.

Microprocessor juggernaut Intel plans to open its new Auckland-based New Zealand office in July in the midst of a blizzard of launches around the Asia-Pacific region.

It has been a busy period for Intel, which has set up subsidiaries in six countries in South Asia in the past 12 months and will open in another two to three countries this year.

The New Zealand office will operate as a full subsidiary reporting to Singapore and will initially comprise four staff. Intel is about to sign a country manager and will add a networking-communications products manager, an OEM/CPU manager and one other person for the CPU side of the business. Intel says its local distribution channel will not change.

Singapore-based Tony Jansz (left), regional sales manager South Asia, says growth of the networking-communications market in New Zealand and the development of this area within Intel were major reasons for opening an office here.

“We look at three aspects when we open any subsidiary. The PC total available market (TAM), the growth rate of the PC TAM, and the maturity of the market,” he says.

“New Zealand is not large from a PC TAM perspective but it has a high rate of technology adoption and a high average rate of MHz on the CPUs used. For example, the average systems advertised here are about six months ahead of Europe and the UK.

“Because of the maturity of the New Zealand market, networking and communications will be as important to Intel as the CPU and motherboard business.”

Intel has been bolstering its network products division through in-house R&D and acquisitions. At the start of the year it purchased European switch and router company Case Technology for $US72 million and then it bought a 15.5% stake in PC card manufacturer Xircom for $US52 million.

“Our objective is to get 100Mbit/s network adapter pricing down to 10Mbit/s prices as fast as we can. Prices have already dropped by 30% during the past three months.

“We are becoming very aggressive in the networking business and are launching a couple of 10BaseT switches, a 10/100 stackable hub, a small router and a fibre switch around the South Asia region. These will be shipping in New Zealand in May.”

Intel’s recently announced LAN-on-the-motherboard chip, which will enable computers to attach to the network without network adapter cards, will be suited to the workstation and server environment, says Jansz.

“We don’t believe we’ll see it in all systems. We have four different market systems -— home/consumer; business; high-end workstation; and server.

“For each we have a road map. Most OEMS [original equipment manufacturers] will have plans for products that are node or network-specific, a product that will have local area network [LAN] management on board. The LAN-on-the-motherboard chip fits the Net PC specification perfectly.

“It will lower costs by reducing the need for a physical network card and increasing efficiency and reliability — you won’t have compatibility issues with the type of card you have, and performance will be higher because there is a more natural connection to the computing environment on the motherboard. Like all our chipsets it will have support for the desktop management interface (DMI) standard built into it.”

Jansz says having a local office in New Zealand will enable Intel to give more timely information to its channel and customers, especially in areas such as networking, which has not had a high profile in this country.

“In the past 12 months Intel has evolved into a technology organisation as opposed to a CPU organisation. In New Zealand you only see the noisiest stuff but now we will be able to provide information on other significant areas of the business.”

During his visit Jansz carried out workshops on the upcoming Pentium II chip (a combination of Pentium Pro and MMX technology, with Level 2 cache built in) with local PC assemblers. The Pentium II, which will be aimed primarily at the consumer market, is expected to ship in the next three months.

Thanks to more powerful processing power and graphics technology, Jansz predicts that this Christmas will be the best the PC market has seen.

“So far each year has seen more of the same. But this year with MMX and Pentium II technology reaching the top of the consumer market by Christmas, we will see truly compelling multimedia educational and entertainment applications at a compelling price. We will ensure that from the day it ships the Pentium II will be the same price or lower than the Pentium Pro.”

Another such application will be personal video-conferencing, says Jansz. Intel has planned a low-priced personal video conferencing technology that runs over normal telephone lines (no ISDN required).

“Within 12 months we will have a system comprising a Pentium II PC, a USB [universal serial bus] camera, and software on the silicon. You will also need a DSVD [digital simultaneous voice and data] modem and I believe it will cost under $US200. There won’t be any need for installing ISDN cards or ISDN charges.”

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