SAN FRANCISCO—Intel is trying to make the case that a collection of chips is worth more than the sum of its parts.
The chipmaker presented its argument in several ways on Tuesday. For one, Intel said it has seen a benefit in marketing several chips together, as it has done with Centrino, its bundle of technology for wireless notebook PCs.
Speaking at the Intel Developer Forum here, Intel President Paul Otellini said the next target for such a bundle will be the home PC, which is being transformed from a productivity machine into a home entertainment center that demands both speed and new features, such as content protection.
In 2005, Intel will relaase dual-core chips for servers, desktops and laptops, Otellini said. By 2006, the company expects about half of its chips to have such a design, with all future products being designed around multiple cores. As expected, Otellini discussed some of Intel's dual-core plans during his presentation.
The various moves are aimed at giving Intel a prime position in the digital home and to help the company protect its traditional stronghold in the business market.
The plan for the long term comes as Intel is warning that the near-term PC market may not be all that strong. The company on Thursday cut its financial outlook for the current quarter, sending shivers down the spines of some of its Wall Street watchers.
Otellini said the chip industry has recovered from the dot-com bust, with 2004 likely to set a new record for communications chip sales and possibly for microprocessors.
"We are seeing the surge after the bubble," he said.
"A better way"
But there's lots of work to do still. As part of its overall effort, Intel is increasingly working to shift the focus—that of its own designers and also of its customers—from raw clock speed to improvements by way of adding new features, including releasing so-called dual-core processors and technology like , which will work to allow PCs to run multiple independent operating systems at the same time.
"This is a better way to think about our products," Otellini said in his keynote. "It is a better way to market our products."
"This is not a race. This is a sea change in computing, and we ought not to look at this as a race."
"We are dedicating all of our future product development to multicore designs," Otellini said. "We believe this is a key inflection point for the industry."
He said 40 percent of desktop chips and 70 percent of notebooks chips that Intel ships in 2006 will be dual-core. Of server chips, 85 percent will be dual-core, he added.
The dual-core mobile processor is code-named Yonah, Otellini said in a meeting with reporters.
During the speech, Abhi Talwalkar, vice president of Intel's enterprise platforms group, joined Otellini to show off a dual-core version of Montecito, Intel's next Itanium chip.
The Montecito chip includes two cores that will each be capable of executing two simultaneous instruction threads. Thus when Talwalker showed a server with four Montecito processors running Windows, the machine was running 16 independent tasks at the same time, as each chip had two cores and so sported four threads.
Right now, dual-core chips are standard in high-end servers, but not the mainstream machines, most of which use Intel chips. IBM began the dual-core drive in 2001 with its Power4-based servers, while Sun Microsystems and Hewlett-Packard followed suit this year.
Dual-core chips are useful, said IDC analyst Jean Bozman. "It's a way for computers to walk and chew gum at the same time," Bozman said. That's particularly important in servers, which by their nature are trying to serve up many applications at the same time.
And Montecito could help convert some Itanium holdouts. "Having Montecito will be another powerful incentive for customers that have been holding off," Bozman said.
However, Otellini did not show a dual-core Xeon chip. He declined to detail when Intel would demonstrate such a chip and bristled at the assertion that rival Advanced Micro Devices, which showed off a dual-core Opteron chip last week, has the lead in technology development.
"This is not a race. This is a sea change in computing, and we ought not to look at this as a race," Otellini said during a post-keynote question-and-answer session. Still, the first demonstration of a dual-core Xeon would be considered important as its design will likely also mirror that of Intel's dual-core desktop chips.
Intel's dual-core Xeon plans were keenly scrutinized. "It sounds to me like they're terrified of saying something definitive and then having to backtrack, which implies that there's still some fluidity in their road maps," said Illuminata analyst Gordon Haff. "They just sat back and let AMD make its 'first with dual-core' claims without rebuttal."
Looking at Vanderpool
Vanderpool will allow PCs to do even more by simultaneously splitting one PC into multiple partitions, each of which can have a different purpose. One partition could be scanning for viruses, while another runs a person's applications, such as word processing or computer games.
Paul Otellini, president, Intel
Otellini demonstrated one PC using Vanderpool to run office applications, games and voice over Internet Protocol, a computer-aided design application running on Linux and also a virus scanner.
Intel cautioned that Vanderpool, as well as a set of security technologies known as LeGrande, won't come until Microsoft ships the next version of Windows, code-named Longhorn, in 2006.
As for the digital home, Otellini used his speech to talk up a proposed standard for sending protected content over traditional IP networks. He noted that Microsoft has issued a statement saying it will support the technology, known as DTCP-IP (Digital Transmission Content Protection over Internet Protocol) in future Windows Media products. Intel said it is working to get Apple Computer on board as well.
"Maybe you can get them to help get a better name for it," Otellini quipped.
Intel also confirmed that it had hired Eric Kim, a Samsung Electronics executive, to head up corporate marketing for Intel. "We don't recruit from the outside very often," Otellini said to reporters. "We were trying to get someone who has not just a technical backgronnd but also a background in consumer electronics."
The chipmaker's series of recent product delays and its overenthusiastic expectations for the third quarter also made their presence felt at the show.
"We had some fumbles," he said while talking with reporters after the speech. To address the issues, he said, "we went back to the basics."
For example, Intel reinstituted its traditional requirement for 90 percent confidence in its ability to meet its schedules and re-evaluated design programs so that it uses consistent standards for conservatism or aggressiveness, he said.
Wireless and more
But Intel isn't only looking to big leaps in technology to make its products more attractive.
The chipmaker will beef up product platforms such as Centrino with things as simple as new ways of connecting with other computers to share data. The chipmaker plans to make WiMax, the wireless broadband technology, an option in its Centrino platform, for one.
Intel has already begun sampling the chip, code-named Rosedale and based on the 802.16-2004 standard, to its key customers. It's expected to ship the chip in volume late this year or early in 2005.
"Starting in 2006, we have made a commitment we will integrate as an option WiMax silicon into the Centrino notebook platform," Otellini said.
By later in 2006 or 2007, adding the highly anticipated WiMax to a computer will mean only a small increase in component costs, a cost that's comparable to that of Wi-Fi today, Otellini said. Otellini on Tuesday also unveiled an initiative, the Intel Cross Platform Manageability Program, designed to help create ways for companies to better administer to computer hardware, ranging from cellular phones and notebooks to servers.
Intel plans to offer a Pentium 4 processor with 2MB of performance-enhancing cache by the end of this year, Otellini said. Right now, most Pentium 4s have 1MB.
NASA representatives also were on hand to tout Itanium. The U.S. space agency is building a 10,240-Itanium supercomputer from Silicon Graphics Inc., called Project Columbia, that's expected to have performance of 60 trillion calculations per second, or 60 teraflops, when it's complete by the end of the 2004. By contrast, the fastest supercomputer today is NEC's Earth Simulator at 35.8 teraflops.
CNET News.com's John Spooner contributed to this report.