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Intel Plans Unprecedented Push for New Chip Set
May 27, 2004
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Intel Corp. (Santa Clara, CA, U.S.) plans to focus unprecedented attention on one of the more obscure components of personal computers when it launches its newest chip set next month.

The attention follows a fundamental shift in Intel's product marketing strategy, in which the world's largest chip maker has said it will focus less on the speed of the chips and more on the features and user benefits of the Intel platform.

Chip sets—groups of integrated circuits that work together as humble gatekeepers for data coming into and out of the core of the PC—have tended to miss out on the media and marketing attention paid to the brains of the operation, the microprocessor.

Microprocessors, such as Intel's Pentium 4 or Itanium 2 chips, are more visible because they control how fast the PC can run, and consequently have gotten the media attention and millions of Intel's advertising dollars.

Intel's newest chip set, code-named Grantsdale, will be pitched as one of the stars of the show as the importance of PC speed gives way to multimedia and communications features.

To be released by the end of June, Grantsdale has been upgraded with more powerful sound and graphics, an ability to turn a PC into a wireless access point, and a speedier link for peripherals and memory.

Intel designed Grantsdale to lead a new generation of "entertainment PCs" to be shipped later this year, part of a plan to bring PCs into the living room and displace consumer electronics equipment.

William Leszinske, the director of marketing for Intel's "digital home" initiative, said Intel is making a special effort to train retail salespeople to explain the benefits of the Grantsdale chip set, even if consumers aren't introduced to the intricacies of how a chip set works.

"The chip set delivers a lot of the value," he said.

Grantsdale will be sold at around the same price as an older chip set, about U.S. $30 or $40 each, so it won't bring in more profits for Intel on its own.

Because the chip set incorporates features such as Dolby audio and advanced 3-D video previously found only in add-on cards, PC makers may be able to configure less expensive PCs that catch the eyes of power-hungry consumers, Intel says.

The features in Grantsdale also could help persuade shoppers to seek out Intel-based computers, said Intel spokeswoman Laura Anderson. That may also steer shoppers away from PCs built with chips from rival Advanced Micro Devices Inc.

Anderson said Intel is aggressively adding features to its chips that cannot be quantified in raw speed figures, such as two-in-one, or dual-core, processors.

Analysts say Grantsdale could be the product that finally gets media and PC consumers to pay attention to the overlooked importance of chip sets.

Intel's chip sets bring the company between $3 billion and $4 billion a year in revenue, and Intel sells about 60 percent of the chip sets for all personal computers, said Dean McCarron, an analyst with Mercury Research.

Grantsdale, he said, will improve memory speed, communications, multimedia, and wireless communications. (Reuters)

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