The Pentium king is dead. Long live Core 2 Duo!
Nearly 13 fruitful years of dominance in the processors’ area have ended yesterday for Intel’s Pentium, with the launch of the next generation Core 2 Duo chips. The new corporate slogan, “Leap Ahead”, is the exact definition for these spectacular processors.
On Thursday, Intel organized an impressive manifestation with the launch of Core 2 Duo chips, at the exact same spot where the “deceased” Pentium was presented, 13 years ago: at the Silicon Valley headquarters.
The official debut of Core 2 Duo, based on the revolutionary Core Microarchitecture, is one of the biggest “leap ahead” for Intel in more than a decade, marking the entry in an ere where company officials hope to regain the crown from rival AMD.
It is useless to underline how important this launch is for Intel and how many expectations find their object into Core 2 Duo’s architecture. Among the advantages brought by the new line of chips are the energy-friendly functioning and the superior performance, both for generally half the price you’d pay to get an Athlon64 from rival AMD.
“This isn’t just an incremental change in terms of performance, it’s a revolutionary leap,” Intel Chief Executive Paul Otellini said, adding the desktop chips deliver 40 percent faster performance while cutting power usage by 40 percent. The laptop chips will run 20 percent faster, he added.
“Certainly as far as their previous products, it’s a huge leap ahead,” Jim McGregor, principal analyst with technology market research firm In-Stat, said about the new chips.
The stake about having better processors which consume less power and cost less is the corporate customers, many of them possessing thousands of computers and anxiously awaiting for hardware products (like processors) that would allow them to reduce the overall expenses.
Tsuyoshi Abe, an Intel sales and marketing general manager, said it is going to be a tough fight with AMD, but he is also confident of taking back market share with the new Core processors.
“The competition in the market will continue to heat up as every maker tries hard to improve its products, but I believe our new processors can help us beat our competitors,” Abe said at a news conference.
“You’ve got to give Intel credit, they’ve come back with a much more competitive architecture,” McGregor said.
“Our new Core Microarchitecture delivers stunning leaps in performance,” Chief Executive Paul Otellini said at Intel headquarters in Santa Clara. “These are the best microprocessors we’ve ever designed, the best microprocessors we’ve ever built.”
“You get high-end performance, balanced with longer battery life, and they’re cheaper than anything they’ve introduced at this level before,” said Shane Rau, a semiconductor analyst with IDC, a technology market researcher. “It’s going to be the fastest-performing thing Intel’s got, but compared to the best they had a year ago, you’re getting more and more for less and less.”
According to Otellini, the new Core 2 Duo processors and their Core Microarchitecture have received more positive reviews than any other new processor in history.
“They are back,” said Nathan Brookwood, principal analyst at Insight 64 in Saratoga. “For the last 18 months, Intel as a formidable competitor has sort of waned. They just didn’t have the product line-up that they needed to compete with AMD’s product on a feature or performance or power basis.”
Core 2 Duo’s launch is not the only positive thing that Intel does in the competition with AMD. They have also announced a drastic price reduction (up to 61%) for their older Pentium processors, which have piled up on stores’ shelves due to their inferior performance and higher energy consumption, compared to AMD’s chips.
Intel reported second-quarter sales of $8 billion, operating income of $1.1 billion, net income of $885 million and earnings per share of 15 cents. Sales declined 10 percent from the previous quarter and 13 percent from a year ago, while net income fell 35 percent from the previous quarter and 57 percent from a year ago. Excluding the effects of share-based compensation, the company posted operating income of $1.4 billion, net income of $1.1 billion and EPS of 19 cents.
Intel’s second-quarter gross margin of 52.1 percent, versus April guidance of 49 percent, which the company attributed to better than expected microprocessor and chipset unit costs and inventory valuation. However, the company felt the brunt of lower average selling prices as it engaged in a price war with arch-rival AMD.
Sales fell sequentially in all of Intel’s geographic regions, led by Europe where sales dipped 19 percent. Asia-Pacific sales showed the smallest decline at 6 percent.
Intel downgraded its second-half forecast. For 2006, Intel now expects capital spending to top out at $6.2 billion, down from $6.6 billion previously, and gross margin to be 51 percent, down from 53 percent previously. R&D expenses are projected at $6 billion, down from $6.1 billion previously.
CEO Paul Otellini vowed Intel would concentrate hard on developing new designs more frequently than it has in the past.
“As it gets long in the tooth, you see diminishing returns,” he said. “That’s why it was essential to move to a new microarchitecture.”
The essential evolution for Core Microarchitecture is the reduction in energy consumption, combined with a more efficient computing power using parallel systems.
The Core architecture is already on the market, integrated in the new line of Xeon processors for servers (Xeon 5100, formerly code-named “Woodcrest”). Yesterday’s event marks the debut of the Core architecture in the desktop area (“Conroe”) and in the notebook area (“Merom”).
According to Zdnet.co.uk,”Core is a pipelined architecture, where instructions move through a number of internal stages between entering the processor and being completed – ‘retired’, in the jargon. As an instruction exits a stage another can enter, minimising the idle time for each internal component. Core has around fourteen stages in its pipeline: as with most modern architectures, there are a number of complications, such as early completion and out of order execution, which make it hard to define exactly how many stages there are.”(http://reviews.zdnet.co.uk/hardware/processorsmemory/0,39024015,39280015,00.htm)
AMD’s response has amazed everyone three days ago, and it definitely equals in importance (in my opinion, it even surpasses) Intel’s Core 2 Duo launch.
In a staggering announcement, chip-maker AMD and GPU-manufacturer ATI have confirmed their future unification, in one of the most important IT acquisitions in probably a decade and most certainly the most important for AMD.
Both AMD and ATI are leaders in their IT segments, and their collaboration has been mutually fruitful until now. This is why a merger between the two companies is a big surprise, but also a hope for a better future.
The acquisition is being paid for with 4.2 Billion in cash, with over 2 Billion financed from a loan, as well as 56 Million shares of AMD stock. The acquisition has been approved by AMD shareholders, though is still subject to the approval of the FTC and ATI shareholders.
“It’s one of the most disruptive and exciting things to happen to the PC industry in a very long time,” said Jon Peddie of Jon Peddie Research. “It’s a brilliant move on their part because they’ve scooped up an excellent company and they have a whole bag of products that Intel doesn’t have.”
