Whittier who has been with Intel for over 25 years, and has worked with memory products development, knows that as the Intel microprocessor becomes a bigger brand name than many box sellers, Intel will have to clear the way for local content developers. The local content developers then will fuel demand for Intels high performance chips.
Ron Whittier spent some time with The Strategist to outline Intels plans for the Indian market.
Excerpts from the interview.
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Q: While computer prices have been on a descend world-wide, the cost of ownership has remained high. Is that reason for concern for Intel?
A: Well, that is out of our control because we do not directly control that market. On the other hand, if we could help in building a vigorous software industry, then the natural competition in that industry should do something about making software more cost-effective.
Certainly, our programme is aimed at generating the broadest support in terms of software and application on the platform. But clearly we dont control that pricing, so we cant do very much beyond that.
Q: In emerging market conditions where purchase of legal copies of software is not very high, should the chip manufacturer be worried about this?
A: Whether it is the US market, or software produced in India all we can do is to create the most open platform, the most healthy platform for software development in India. Then let the market take care of itself. Beyond that it is out of our control.
Q: In the US market, Intel has almost half a billion dollars invested in about sixty companies which develop content. Are there some plans like that on cards for the Indian conditions?
A: Yes, in general what we are trying to do with our investment is apart from making a decent amount of return on them is support the infrastructure to develop software on a connected visual computer. So a number of investments are in that area.
The other thing is that we actually invest in pieces of content to demonstrate classes of content which can be developed on the platform. So we have a variety of investment in that regard.
And we would be prepared to make some investment of some kind in India as our programme gets better defined.
Because we think that content is very much a local issue. Therefore, there are certain things that need to be done. We will follow the same model that we have followed in the United States.
Q: Could you elaborate on the following the US pattern bit?
A: What we do in the US is make equity investments in companies and also specific investments in titles pieces of content where we share the return with the software developer. If we are trying to develop content on a very advanced Pentium II platform then we will work within the industry to find people who want to invest aggressively in that area. And share the returns.
In that sense we would do the same thing in India. We are not as advanced in the programme here in India, but the same notion applies. The software developers that we are working with to get some products into the marketplace, have an arrangement for investment sharing. So we co-invest with them.
That is one model, and we would be willing to pursue that model. The other model is that rather than making an equity investment in an Indian company and actually share in the proceeds as a corporation. So both models work and there is no reason why they should not work in India if the Indian community wanted to pursue that.
All this is however, the classical approach. Intel has invested a lot in terms of the machines that we provide the software vendors with. We have also set a number of laboratories and therefore, all this is investment.
Q: Increasingly you see the television and the computer converge. In the United States the PC is acquiring the characteristics of the television and in Europe, TV is offering the features available on computer? In these circumstances, is Intels general purpose chip strategy relevant?
A: Yes, absolutely. We can play the broadcasted content that the TV producers produce today whether it is terrestrial, cable or satellite. We have the technical capability to receive that content on personal computers.
The playing of traditional computers on television is not particularly exciting to do. It has been there in the market for half a dozen years. The differentiation on what you do on PC and what you do on a computer is not very large.
With the advent of an age where you can broadcast video plus data, a number of very interesting things start to happen which is to bring activity to broadcasted video. We are very interested in that. We think that the personal computer has certain inherent advantages to be able to receive that kind of content.
So we are working very closely with the industry in the United States to take the basic capability to receive that content and put it on personal computers, either on a traditional personal computer or on a television. If the television is being used as a display unit then we are looking at that model also.
But generally we think that the key is a strong computing capability to receive all that content, handle that connectivity problem that separate video from data and display it in a variety of ways.
Q: Then will the original set of TV manufacturers be on a safer groundin the broadcast market?
A: I do not think either of them fundamentally changes the business plan. I think people would continue to make televisions for long periods of time. There is the analogue content and there will be the digital content that is played directly to the television.
On the other hand, I think there is going to be an exciting number of different kind of broadcasting that is done that involve data. When it comes to data I think that predominant receiver of video plus data will be personal computers.
In addition just because it can do it, the computer will receive a traditional video feed.
Q: Intel is moving almost all the peripheral functions of its chip architecture to the core processor. So does it matter what kind of box you see one that looks like the PC or the one that looks like a TV?
A: If you want to know what that does to the consumer electronics market then you have to know that the consumer electronics market makes a different sort of products. These products are display intensive but I am still convinced that they are going to have different set of products that are more traditional appliances as opposed to a device that is really a computer that can handle video plus data feeds. So I dont think there is going to be any wholesale movement from TVs to PCs.
I think a personal computer capable of handling video and data feeds will be a totally different market.
Q: With the 64-bit Merced chip, you are going in for change in the socket design. This will mean a change in the way the motherboards are designed. Is this an attempt to lock out the competition?
A: Well, we had a fairly fundamental change in the motherboard design with Pentium II. With this processor we had to put more and more computing elements close to each other so that that the communication between the processor and other elements like memory and graphics are all enhanced so that the performance moves up.
Just from a fundamental standpoint we will have to continue to change the packaging.
Q: And from a strategic viewpoint?
A: If you take a look at the increasing number of platforms that have come into the market from NCs up to super servers. We want to participate in all those machines. They all require different form factors to optimise, you cannot sit still on a particular motherboard design if you want to satisfy a variety of markets.
And if you continue to move these markets to advanced microprocessor design then you have to move them to advanced motherboard design.
Q: But the market feels that this is an attempt to lock out the competition because the changed socket design will be protected through trade patent. In effect that will shut out companies like AMD and Cyrix.
A: Well, each company in the marketplace is entitled to the products that optimise their products in the marketplace and AMD and Cyrix could do that.
I think from a standpoint of a general system performance where everyone generally agrees that the design that we use for
Pentium II provided the performance break that we needed and that was a justification for that design as opposed to some artificial story that says that we are trying to lock out competition.
We have competition. We recognise competition. We are trying to expand markets. We have a bigger problem of expanding markets rather than coming up with programmes that try to prevent other people from competing with us. We are a market expansion oriented company.