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Intel @ ECTS 2002 - part 2
This is the second part of our interview with Intel. The representatives are Dan Snyder and Mathias Raeck. If you missed the first part then you can have a read here. The interview took place at this year's ECTS event, held in London.

We ask them questions regarding the following categories :
  • OEMs
  • Itanium 2
  • Desktop 64bit processing
  • Economics
    How important is the support of OEMs to a business like yours?
    It's vital. We have an internal rating called "Vendor of choice", where we are constantly trying to reach the highest levels possible. This means we ask all the OEMs large and small "how are we doing as a supplier to you?" and we currently are beating our target, which is great.
    Throughout the lifecycle of the Pentium 4 so far, OEMs have been in favor of it. Are there any specific reasons for this?
    OEMs value our support and look at more than one benchmark in making a CPU decision. We have extensive service and support plans with OEMs to ensure quality remains very high. We have a large number of staff that are located on site with OEMs who work with them on their designs. I worked in one of our factories and know firsthand the billions of tests each CPU goes through before it ever reaches a PC.

    Brand is also an important issue. The Intel brand is extremely well known. OEMs look at companies who can innovate and come up with plans for the next 10 years. Hardware and both software require innovative ideas.
    How hard was it to convince OEMs to support the Pentium 4 platform?
    We didn't have much trouble convincing OEMs to support Pentium 4. They saw the value, performance and OEMs believed that things were moving to multimedia. It's very important for them that a clear path is shown.

    When we design a CPU we go to the community to find out what they need and want. We take their requirements and see what our engineers can do.
    Recently it has been known that Steve Jobs/Apple have hinted a move to the x86 platform can Intel confirm that it has been approached?
    Sure, we meet with Apple just like we meet with every major OEM to pitch our latest and greatest products. You may remember a number of years back they had a Houdini system which had a 486 and a Motorola chip so they have done it before. I don't have any knowledge of any current developments, but of course we'd love to sell them our products!
    Why was there a need to launch a new Itanium processor so quickly after the launch of the first?
    Itanium had been in beta tests and trials for over a year before it was launched. With a product like Itanium you don't just pop it in a socket, load WinXP and go. OEMs like IBM, HP, Compaq, Unisys and others were doing extensive testing and qualification for many months. A lot of software development was done during this testing period. For example Microsoft had dozens of Itanium systems for Win64 and Office64 development.

    If you look at the market at which the Itanium is aimed at it has different criteria. The enterprise market looks at stability, reliability, serviceability and manageability much more closely than in the desktop market. Launching a product in that market takes a lot more effort and what we said with Itanium was that it's the first step into the high-end server market for Intel. Itanium for developers and OEMs to get familiar with the product through testing and to create applications.

    We never said that we expected to sell millions of Itanium based systems at launch, rather to seed the development and qualification of the architecture in the business environment. We are pleased with the amount of support given by OEMs, software and Application developers and now you can see a whole array of server applications come out such as database vendors, Oracle, SAP and communities like Linux.
    What are the major changes in the new Itanium processor?
    The most noticeable change is clock speed. We launched at 1Ghz. But also the bus size has increased quite significantly. With its massive execution resources, 6.4 GB/sec system bus bandwidth, and 3MB integrated L3 cache, the Itanium 2 processor offers up to 100 percent higher processing performance than the original Itanium processor. We have 3 more Itanium "family" members in the works which will appear in the next few years.
    How much does the Itanium 2 processor cost?
    Itanium 2 processors will feature 3 MB and 1.5 MB of integrated L3 cache and 1 GHz and 900 MHz frequency speeds at prices ranging from $1,338 to $4,226.} If you look at the server market Intel sees a great window of opportunity to provide very cost effective solutions which offer blazing performance

    We are a high volume manufacturer and we want ship millions of units therefore price/performance is the key.

    People have been astonished right the way up from the Xeons to the Itaniums and recently we did a press release regarding how Hollywood studios and companies like Dreamworks are moving to Intel-based systems after looking at the price/performance ratio of our products.
    How problematic is it to get large corporations to upgrade their systems so soon after implementing Itanium 1?
    Itanium 2 is pin-compatible with Itanium as will future Itanium "family members", and since the initial Itanium wasn't a large volume product there wasn't a huge number of systems that required upgrading. Itanium 2 is a higher-volume processor in this market since people saw the Itanium as a test bed and Itanium 2 as the volume ramp product.
    When are we likely to see a 64bit desktop processor from Intel?
    Our current product line-up on the desktop side is all 32bit processors but many desktop applications can already execute at 64 and 128 bits with Intel's SSE and SSE2 instructions today. You can also address huge amounts of memory, more than enough for PC users today and the near future.

    Intel has spent a lot of time with developers to optimize dozens of applications for Itanium, but if you look at the desktop side you have hundreds of applications that are optimized for SSE and SSE2.

    When talking about 64bit processing you have to think about many other factors such as operating systems, drivers, chipsets, BIOs amongst other things. Or for example AGP compliance. Current AGP isn't specced out for 64bit. Cost of memory as also important to the people that ultimately buy PC's.

    Intel has spent years working with companies to develop and optimize operating systems and Applications for Itanium and Pentium 4.
    Are you waiting for your competitors to exhibit a 64bit processor first so the market becomes more established to this technology?
    In the enterprise market the Itanium product family is making good headway. And on the desktop side the Pentium 4 is the highest performance processor which is very popular. We will have 3Ghz before the end of the year.
    When a 64bit processor comes out from Intel, will it support 32bit applications?
    Backward compatible is very important to Intel as demonstrated with Itanium.
    How much demand have you seen for a desktop 64bit processor?
    Currently we've seen very little questioning about that.

    People/companies want technologies and features that deliver more performance today or enable them to do things they couldn't do before.

    The big effort from Intel goes into optimizing the platform and applications to provide great price/performance for consumers.
    Recently you have cut your estimated profits for the third quarter of 2002 and 2003 as a whole, why is this?
    We still believe that we are on target for the third quarter and hope to see a slightly better fourth quarter. The fourth quarter tends to be the busiest of the year. The release of a 3Ghz part should also help us in the fourth quarter.
    How has the economic slowdown affected Intel?
    It has affected everyone. IT spending is down. However if you spend during a downturn you'll be better placed for when the markets pick up. So we have kept the R&D investments, work on a new fabrication plant and the capacity is there.

    So when the demand picks up we can flick a switch and we're ready to go. As an example, we recently announced that we will resume building our new fabrication plant in Ireland.
    Can we expect job cuts or restructuring from Intel in the near future?
    In the second quarter we announced that there will be 4000 job cuts which will be mainly through attrition and redeployment.

    In the high-tech industry we are in attrition of around 10% a year is normal.
    We would like to thank Dan Snyder and Mathias Raeck for taking time out to answer our questions.
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