UG Network _/_ UG Library _/_ Fermoyle_/_ About Ken Fermoyle
Acrobat: Is It Changing Publishing as We Know It?

Intel's SteamRoller Hits Speed Bumps;
How Will This Affect Grass-Roots Users?

by Ken Fermoyle

The Intel juggernaut appears to be slowing recently. For roughly two decades the company forged ahead, flattening opposition, amassing huge profits and delighting stockholders. Its strategy: develop ever-more-powerful microprocessors, sell them initially at high markups, then drop prices gradually as new generations come online.

Speed bumps in its profitable progress apparent by spring 1999 range from legal woes to new Pentium III chips that may be ahead of their time (and pose privacy threats). For virtually the first time in its history Intel faces real competition from other chipmakers and serious defections in the ranks of computer manufacturers.

How will this affect the average, non-corporate computer user? Let's look at the facts.

First, Intel appeared to lose momentum when the computer market changed drastically. Prices of entry-level computers plummeted rapidly. Since the late 1980s PCs selling for over $2000 dropped from a 40% market share to less than 10% in 1998. Under-$1000 systems became common and ads now tout sub-$800 boxes routinely.

Intel attempted to fill the low-end gap in its CPU (Central Processing Unit) lineup, but critics uniformly panned the first Celeron chips. AMD and Cyrix offered chips that equaled, even out-performed, Intel's economy models. A growing number of computer manufacturers, striving to meet the demand for lower-priced models and still make a profit, abandoned their Intel-only policies and began using AMD and Cyrix products also.

The result: Intel's market share in PC microprocessors dipped from 87% in fourth-quarter 1997 to 76% in 4Q 1998.

Legal problems occurred when the FTC (Federal Trade Commission) filed an antitrust action against Intel. A tentative settlement had been reached, but details were sketchy as this article was being written. (Almost simultaneously, Motorola filed a suit charging that Intel stole trade secrets by hiring Motorola chip designers.) Industry analysts did report that the result would be a "kinder, gentler, less aggressive" Intel, which would be good news for competitors and other technology firms (including computer makers).

Ultimately, grass-roots users at the bottom of the food chain will benefit from freer exchange of information, an end to "blacklisting" of firms that refuse to enter overly-restrictive licensing agreement and the greater competition that should result.

The Pentium III has raised problems, too. Many industry critics say it's a solution to a problem that barely exists right now. Some cautioned business buyers that PIII chips offered few plusses chips in desktop machines running most current software applications. "PIII Advances Aren't Enough," proclaimed PC Week in a cover story headline, adding: "The chip shows only marginal performance improvement over Pentium IIs -- no more than 8% -- when running most business applications."

A PC enthusiast site, Ars Technica, tested a 500-MHz Pentium III against a 450-MHz Pentium II and found the increase to be a meager 11%. Of course, a few applications, especially those involving 3D graphics, do take advantage of certain PIII features. But if you're not a serious game-player, don't look for much bang from the high-priced new Intel chips.

Then there is the privacy issue, which could be the most critical of all for us end users.

Computers based on the new Pentium III chips that run at 450 and 500 MHz began rolling out on February 26. These chips feature the Processor Serial Number (PSN), an embedded 96-bit ID that identifies the user's PC to any software that knows how to ask for it.

(Recent reports indicate that Pentium II 333 and 366 chips with 256K integrated cache and Celeron 266 and 300 chips for laptops were shipped with prototype PSN enabled beginning January 25, 1999. One anonymous Intel employee has been reported as claiming that all 25-micron Intel chips have PSN ability.)

On the positive side, Intel claims PSN technology will help keep stolen credit cards from being used online, aid in discouraging CPU counterfeiters, and enhance some computer services.

Groups concerned about users' privacy being compromised voice loud opposition to the PSN. They say it allows user movements to be tracked, data to be collected about specific users, and eliminates user anonymity.

Intel attempted to answer privacy advocates' concerns with a software fix that turns the ID off when desired. However, the ID does not remain permanently deactivated. Instead, rebooting activates it again. Early on, groups called for a hardware fix, insisting a software fix will not work.

In addition, cryptography expert Bruce Schneier discussed with CMP Media's Electronic Engineering Times the possibility of serial numbers being forged or stolen.

In mid-February in an online article, Fred Langa of Windows Magazine, described the anger and frustration he saw during an informal online poll of users' opinions about the PSN. "I think we're seeing the start of a strong anti-Intel backlash, analogous to the anti-Microsoft fervor that's changing the operating system landscape." The latter reference is to the sudden swell of interest in Linux by business users, which has not yet made any impact among grass-roots users.

The latest news is Dell, Gateway, Compaq, and IBM will ship Pentium III IDs turned off in the BIOS. But, a German magazine, C'T, reported that software, quickly crafted by a techie staffer as an experiment, remotely switches the ID on and allows others to read it!

In the meantime, privacy groups have complained to the FTC and are boycotting the Intel chip. National Semiconductor (parent of Cyrix) and Advanced Micro Devices (AMD) say they have no plans to create chips with the PSN feature.

For links and details go to www.orcopug.org, click on Hot News. If you have another viewpoint, please send it to: Linda Gonse editor@orcopug.org or Ken Fermoyle, kfermoyle@earthlink.net.

Does all this mean Intel will fade away? Hardly! Called the "amazing profit machine" by Forbes Magazine, the company has used its profits well, acquiring or investing in a variety of technologies that not only add new products to its lineup, but spur demand for its core business.

Mike Elgan, Windows Magazine editor, pointed this out in an April 1999 editorial. "The company funnels billions into technologies beyond the microprocessor: PCs, RAM, videoconferencing, CAD software, networking, Internet plumbing, graphics, e-commerce, even toys. It does this to crank up the performance of software and peripherals so buyers have a reason to buy expensive new Intel chips."

Our advice: stay at least six months to a year or more behind the cutting edge. If your Pentium 166 or Pentium II machine does the tasks you ask of it, don't upgrade just for the sake of having the latest and greatest on your desktop.

Things may change somewhat by the time you read this, but we hope the background information will put them in perspective.

Ken

(Author's Note: I want to give credit to Earthlink Network, www.earthlink.net, source of much of the information contained above. Its site deserves regular visits because it contains a lot of useful Web-oriented information that is updated frequently.)


UG Network _/_ UG Library _/_ Fermoyle_/_ About Ken Fermoyle


Ken Fermoyle has written some 2,500 articles for publications ranging from Playboy, PC World and Popular Science to MacWeek & Microtimes. He was cohost/producer of a radio show on computers and a partner in a DTP service bureau during the '80s. Ken's Korner articles are available free to User Group newsletters and Websites. For permission to reprint this article, contact kfermoyle@earthlink.net.


EDITORS NOTE: Only UGNN Affiliate User Groups are granted a one-time reproduction license of this article so long as the unaltered credit/ID paragraph (above) is published with the article, and a copy of the printed article is mailed to
Fermoyle Publication
22250 Capulin Court,
Woodland Hills, CA 91364-3005.
Contact: kfermoyle@earthlink.net for further information



Articles posted here by UGNetwork News staff, or the UGN News Service may be reproduced ONLY after your group has become a registered Network affiliate. Register at: http://www.user-groups.com/UGCommunity/UGRegister.html. Contact the UGNet-News for authorization and the UGNet News Affiliate publicity package. Thank you. Copyright 1995, 1996, 1997, 1998, 1999, 2000 The User Group Network, and on behalf of the respective authors. All of this content, and the associated services are donated through the generous efforts of members from the User Group community. This content area is provided by The User Group Network News Service, and is sponsored by The Design & Publishing Center as a public service.