The key to Intel's domination
Published: 11 Aug 2004 12:35 BST
Even before Intel came into the market, Wi-Fi manufacturers were caught in a price spiral, one that prompted Microsoft to bow out of the Wi-Fi router market in June. Still, whether Intel was the direct cause or simply the straw that broke the camel's back, its entry into many of these markets, including graphics, was followed by turmoil before a few dominant players emerged -- including Intel.
The company is unapologetic. Chief executive Craig Barrett has said that Intel's job is to "innovate and integrate." And Sunil Kumar, director of marketing and planning for chipsets and software in Intel's desktop PC group, would seem to agree.
"We want to get every home connected," Kumar said, "and we want to facilitate that" with the built-in access point technology.
Integrate and dominate?
The morphing of Intel's chipsets is not unlike the evolution of Microsoft's Windows operating system, which has also absorbed numerous features over the years. The addition of more features has generally benefited consumers by helping PC makers cut prices on machines. Low-price desktop models, for example, use integrated graphics chipsets to eliminate the cost of a graphics card.
Microsoft, though, has seen that bundling can lead to legal problems. The software giant ran into trouble in 1997, for instance, when the US Department of Justice accused it of violating a 1995 court ruling that barred it from imposing anticompetitive licensing terms on PC makers. The licensing terms for Windows 95 had required manufacturers to also license and distribute Microsoft's Internet Explorer Web browser. The case went to trial, and an eventual settlement caused Microsoft to change its licensing terms and the way it paired products.
So far, Intel has mostly avoided the same level of legal troubles. Currently, the European Union and the Japanese government are investigating the chipmaker's marketing activities, but that's the extent of the large, public investigations. An investigation by the Federal Trade Commission in the late 90s was settled before trial, although sources indicate the agency continues to monitor Intel's activity. Rival Intergraph brought an antitrust suit and won a multimillion dollar patent settlement though the antitrust claims were tossed out.
Intel offers multiple versions of its Express 915 chipset with different features and different prices, allowing PC makers and customers to choose according to their budgets. The most basic 915 Express chipset, the 915P, sells for $37, while the 915G, which includes graphics, costs $40. Among other features, the 915 enables a PC to accommodate more than one drive, lets a PC get used as a DVR and adds high-definition audio.
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