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Opinion: Will Intel recover its mojo?

Opinion: Will Intel recover its mojo?

Until two years ago, Intel looked unassailable.

Although Intel never enjoyed a monopoly in the pure sense of the word, it wasn't far off that position. The company's processor chips dominated just about every possible market niche. There had been times when Intel's market share dropped, briefly, or when market conditions meant fewer processors were being purchased, yet the company never faced any serious external threats to its crown.

Intel's main competitor, AMD, occasionally managed to edge ahead of Intel in a technically esoteric way, but the smaller chipmaker was notoriously inconsistent and rarely capable of capitalising on any short-term advantage. There were other rivals too, but these days it's a struggle to remember their names.

Then Intel stumbled. Badly.

It was at precisely this moment that AMD finally got its act together and strung together a series of smart technical moves. More importantly, AMD's management team put the right strategies in place to ensure these developments were more than ineffectual flashes of brilliance.

AMD was pulling ahead of Intel at the high end with its 64-bit, x86 server chips and hammering Intel with desktop processors that beat Intel's Pentium range on both price and performance. Last year, US retailers sold consumers more computers with AMD inside than Intel-based hardware.

Across the board, AMD now offers credible alternative products while in many niches Intel can only hope its brand name still carries enough cachet to keep the chip foundries busy.

It's not just AMD. IBM's aptly-named Power chips now drive high-end servers, supercomputers and Apple's blisteringly fast flagship desktops.

Moreover, IBM chips will power next-generation video game consoles from Microsoft, Sony and Playstation. That's 100% share of a fast-growing market.

Last week Intel made a whole raft of pro-duct announcements in typically impenetrable language with plenty of references to the word 'platform'.

Reading between the lines, there's a clear message that Intel has picked itself up after the stumble.

However, it's one thing to articulate a coherent technology road map; it's another thing to implement it. In the meantime, system builders, resellers and customers can enjoy the benefits of a competitive processor market.

Oracle's foresight: Oracle's bid for retail software specialist Retek is vintage Larry Ellison; smart, opportunistic, bold and aggressive. Moreover, the direct challenge to SAP's earlier bid took most industry insi-ders by surprise.

Conventional wisdom says Ellison has his hands full right now clearing up all the loose ends from Oracle's Peoplesoft acquisition. So, with all other things being equal, battling for control of a relatively minor developer like Retek might smack of imperial overreach.

However, while Retek might only be small, it is strategically important. Oracle and Retek have a long-standing relationship; the majority of Retek users run their software on Oracle infrastructure. Ellison clearly thinks he can't afford to allow rivals like SAP to chip away at the edges of Oracle's empire.

On that basis, Oracle's Retek play is a defensive move. But there's more to it than protecting Oracle's turf. The enterprise application market is in play right now and Ellison is sending out the message that every scrap of it will be contested.

Born again: Apple's never been frightened to use religious metaphors to hype its business. More than a decade ago eyebrows were raised when the colourful Californian computer maker first printed business cards describing people as evangelists - now everyone's doing it including some of the IT industry's drabbest companies.

Right now "halo effect" is a favourite term with Apple's congregation. It describes the hoped-for-boost given to the company's mainstream computer sales by its success with the iPod. The thinking is that consumers will be so satisfied with their portable music players, they will happily stump up the 20%-or-so premium over conventional PC prices to buy an iMac, Mac Mini or Powerbook.

Although the iPod has definitely given Apple a huge lift in sales, profits and profile, so far there's no tangible evidence the company is shifting significantly more computer hardware than it was before the iPod boom. Of course, this may change.

But the reason for an iPod-fuelled revival in Apple's PC fortunes is more likely to stem from the way the musical gadget has broadened Apple's channel reach than from any so-called halos. Retailers will be more willing to sell Apple's computer offerings as a way of getting closer to the source of those lucrative iPods.


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