The Intel empire strikes back

Intel's desktop business has taken something of a hammering recently. It has suffered on two fronts. First, fewer people have been buying PCs. This has affected all companies, but Intel's also had an upstart contender hot on its heels.

AMD has really taken the market by storm in the last couple of years. Its Athlon and Duron processors have the virtues of being both extremely fast - faster than Intel's offerings at the same clock speed - and extremely cheap.

Until now, Intel's response has been limited, and it has allowed AMD to take market share away from it. There have been price cuts on its processors, sure, but never anything totally decisive.

Intel's efforts are about to shift up a gear, however, and has just released a bewildering number of new products.

These are designed to leverage their way into key segments of the market to return the company to god-like dominance over the industry. Let's start with the Pentium 4. So far, this processor has had a less than enthusiastic reception, with criticisms focusing on its poor price/performance ratio.

The release of its 2Ghz processor is intended to silence these critics. I certainly had high hopes for it, but in the final analysis I was slightly unimpressed. Part of the problem is that Intel is about to change the physical size of its processor sockets. What that means for the end user is that if you buy a Pentium 4 system today, future processors won't fit into the system's motherboard.

A further problem is that, today at least, the processor is still too expensive for system integrators to offer prices that will wipe the AMD competition away.

This month also sees Intel's new 0.13micron manufacturing process make its debut. Codenamed Tualatin, this is employed on two new chips: the 1.2Ghz Pentium III and 1.13Ghz mobile Pentium III. This gives the company an opportunity to squeeze even more performance out of this older architecture.

The appearance of a faster Pentium III is especially odd considering Intel's focus on Pentium 4 processors. The Pentium III architecture is around 20 to 30 per cent faster, clock for clock, than the Pentium 4.

Intel would look a little silly selling a Pentium III that is faster than its Pentium 4 line. It is unsurprising, then, that the price on the 1.2Ghz part isn't all that low, and that the Pentium III line will be all but killed off by the end of the year.

Both these obstacles will be removed in the not too distant future. Intel is about to take a scythe to its prices. At the same time, it will plough more and more money into marketing its products; if you think you're sick of the constant blue men adverts on TV then trust me, you ain't seen nothing yet.

Combine this with the sheer number of new products that will be floating around, and you've got a company that is in a very strong position.