Intel Corp. is pushing up the launch of its Brookdale SDRAM-enabled PC chipset, which will debut within two weeks, the company told financial analysts in a conference call Tuedsday.
Paul Otellini, executive vice president of the Intel Architecture Group, said the faster introduction of the Brookdale, or Intel 845 chipset, is part of an accelerated roadmap to make the new Pentium 4 the company's dominant mainstream processor by the end of the year. Otellini reiterated Intel's position that the company will not roll out a double-data-rate SDRAM-enabled version of the Brookdale until the first quarter of next year, although the version to be introduced in the next two weeks will ship with the DDR capability disabled.
Intel was sketchy on details, but some analysts surveyed after the conference call said they expect the venerable Pentium III brand to all but disappear from Intel's desktop processor roadmap. The Pentium III will be retained in the notebook market for the time being, they said. Intel is planning to introduce a Tualatin-class Pentium III built on the company's 0.13-micron process within two weeks. A Pentium 4 notebook processor isn't expected until 2002.
Analysts also took remarks made by Otellini to suggest that the Tualatin will become part of Intel's Celeron value line when it moves into the desktop space later this year at speeds of 1GHz and faster.
Observers added that Intel's strategy is guided by a desire to keep the Pentium III and Pentium 4 chips from competing in the same market, at least until it launches its lower cost Northwood-class Pentium 4 processor in the fourth quarter on a 0.13-micron process.
As part of the faster Pentium 4 ramp, the average selling price of Intel processors will continue to fall this quarter, according to Andy Bryant, Intel's executive vice president and chief financial officer. Bryant would not confirm if the price cuts would be as deep as the 50% average reductions Intel initiated earlier this year to jump-start the Pentium 4. Bryant estimated that lower processor ASPs and uncertain market conditions in other markets would knock another percentage point off Intel's gross margin this quarter, to about 47%, "give or take a point or two."
Intel continues to depend heavily on its processor and PC-chip business to offset growing operating losses in other segments. Operating losses outside the Intel Architecture Group rose to $1.25 billion in the second quarter, a 20% jump over the previous quarter and more than double the same period in 2000. For the first half, operating losses in all other business segments totaled $2.3 billion, again double the year-ago period.
The Intel Architecture Group achieved a $1.47 billion operating profit, down from $1.68 billion from the previous quarter, and half of the $2.97 billion for the same period of 2000. Revenues in the segment, at $5.13 billion, were virtually even with the previous quarter, but down 25% from the same quarter of 2000. First half operating profits in the group totaled $3.15 billion, down 48% from $5.98 billion for the same period a year ago.
