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Intel pins hopes on new chips The company is aiming at consumer electronic devices, set-top boxes and digital gadgets. By Clint Swett -- Bee Staff Writer Published 2: 15 a. m. PDT Monday, September 22, 2003 The article focuses on the new economic plan developed by Intel Corporation aimed on broadening the range of products the company produces. The Intel top executives informed the attendees of annual gathering of hardware and software developers about the attractiveness of consumer electronics market in terms of size and potential profit, which means more jobs and more control, as well as the substantial influence on the economy overall. Statistics in the USA says that people were actively buying such devices as digital cameras, DVD players, and televisions last year.
The market value was $ 93 billion in 2002 and this figure is expected to reach $ 120 billion in 2004 meaning about 25 % increase as compared to 2002. Having acknowledged the potential benefits of conquering the consumer electronics market Intel decided to finance the development of the new chip technology called Bulverde that will allow, upon being installed in phones, to play full motion video, which would certainly be a segment breakthrough, and also feature the possibility to take photographs with up to 4 megapixels of resolution. This technology is planned to have a totally competitive price on the market and, combined with the consumers desire to acquire great quality, will provide multiple return on investment for Intel Corporation. However, in order to view the article in economic context, one must be familiar with the role of innovations and technological progress in the development of any economy and their importance for economic growth.
Let me describe the simplest virtuous circle. For instance, consider the economy with low level of inflation. The Central Bank will have adequate conditions to keep interest rates low then. This pleasant fact will lead to more people willing to land money for the purpose of investing them in business.
This, in its turn, will definitely lead to increased production capabilities. However, let me focus on the role of innovations. Today, everyone seems to be talking about the new economy. Generally, the new economy can be viewed as the most recent in the series of events that changed productivity paradigms and thus changed the way the society exists.
The three-field system increased productivity in medieval Europe and thus allowed population to grow and prosper from trade. Isnt it the best example of innovations at work? In the 19 th century the invention of the steam engine made the same effect. It replaced human and horse power with mechanical energy, provided the trains and steamships for the development of the new economy. Basically, this very invention created the new economy. Today, information plays the role of the economic steam engine.
We are on the point of the new paradigm shift where technologies play the greatest role ever possible. Our society relies on information more than any other society ever did. The new generation of microprocessors, telecommunication equipment and services makes it possible to deliver knowledge and information to the decision makers in real time and thus provides them with the possibility to deploy resources in much more efficient way. This fact is extremely important in our contemporary world because of the growing concern for resources preservation.
Actually, it is needless to remind the basic economic principle of the scarcity of resources, which states that our needs are unlimited while resources are limited. Alan Greenspan once noted his attitude towards the relationship between investments and innovations by observing that the history of the humanity is characterized by gaining knowledge. Knowledge is used by the humanity simply to prolong growth. Technological progress is simply the way to find more efficient use of the resources we already have. Innovation is the steam engine of the economy, while investments is its fuel.
Consumer Electronics Market Value Increase Graph: The expected increase in Camera Phones sales graph: Intel pins hopes on new chips The company is aiming at consumer electronic devices, set-top boxes and digital gadgets. By Clint Swett -- Bee Staff Writer Published 2: 15 a. m. PDT Monday, September 22, 2003 Get weekday updates of Sacramento Bee headlines and breaking news.
Sign up here. SAN JOSE -- For nearly a decade, "Intel Inside" has been emblazoned on the vast majority of personal computers sold worldwide. Now the chip-making giant is pushing hard to make its silicon the chips of choice to power a new generation of cellular phones, set-top boxes and other digital gadgets. At its annual fall gathering of hardware and software developers here last week, Intel executives urged attendees to embrace consumer electronics as a big and prosperous market. Sales of computers are in the doldrums. But people continue to spend huge sums on consumer electronics, said Louis Burns, Intel's vice president of the desktop platforms group.
In the United States, consumers spent more than $ 93 billion in 2002 on such devices as DVD players, digital cameras and televisions. That figure is expected to hit $ 120 billion this year, Burns said. To cash in on that consumer spending spree, the Santa Clara-based company will roll out a new microprocessor for cellular phones next year. Much of the work on the new chip, code-named Bulverde, is being directed from Intel's Folsom campus. The Bulverde technology will allow camera-equipped wireless phones to take photos of up to 4 megapixels of resolution -- a quality available today only in digital cameras costing $ 300 or more. In addition, the chip will let specially equipped phones record and play video in nearly full motion, a big improvement over the short and jerky video that the best phones produce today, said Ron Smith, who heads Intel's wireless communications group in Folsom.
The market for such devices could be huge. Analysts at In-Stat/MDR, a Scottsdale, Ariz. , research firm, said manufacturers shipped about 18 million camera phones in 2002. But they expect shipments to grow to 281. 5 million by 2007. The Bulverde chip will also provide better video-gaming on wireless phones, Smith said. In front of thousands of attendees at the San Jose Convention Center, he showed one motorcycle-racing game running on the Bulverde platform. It appeared to have the same quality as mid level game consoles such as the Sony PlayStation.
Neil Strother, an In-Stat/MDR analyst, said it's hard to judge if Bulverde is more than an incremental improvement. But he said anything that enhances camera phone performance is generally a plus. "I think it would be a compelling device to have, " Strother said. "It will be much easier to sell these to the consumer at this level of quality. " Intel is betting that consumers will want all their electronic gadgets to work seamlessly together in the home. That will require sophisticated yet user-friendly systems that can beam home-edited videos from a PC to a television set, or send MP 3 music files from the desktop computer in the office to a stereo in the bedroom. Technologists are even talking about streaming studio movie premieres over the Internet to television sets.
All that will require significant silicon muscle -- Intel's speciality. To that end Intel is developing a family of chips that would go into TV set-top boxes. Those chips would process information coming in from a PC, a satellite or a cable company, for display on the television. The company is also using its influence to persuade consumer electronics giants such as Sharp, Panasonic and Sony to develop standards to make all their devices work together. "Most people can't make this talk to each other unless they have a degree from MIT, " said Nathan Brookwood, principal analyst with Insight 64, a Silicon Valley research firm.
Intel executives also hope that digital activity will further spur sales of personal computers, whose microprocessors are still the bread and butter of Intel's business, Brookwood said. The company is so committed to the consumer arena that last month it quietly launched a consumer electronics group dedicated to mining the market. "Next year, 350 million consumer devices will be shipped worldwide, " said Glenda Dorchak, who heads the newly formed consumer unit. "Consumers are spending money, so it's important that these devices have the right performance with low power requirements. " With its enormous manufacturing capacity and technical expertise, Intel is well positioned to make a mark in the consumer arena, said Kevin Krewell, an analyst with In-Stat/MDR in San Jose. "Consumer electronics and entertainment is one of the most resilient industries in the last two years, " Krewell said. "Intel has the time, money, patience and people to make it in this industry. " This isn't Intel's first foray into the consumer arena. In the late ' 90 s, the company introduced a line of inexpensive digital cameras, music players and even a microscope -- all aimed at children. The strategy was to sell products that needed to connect to a PC, which would indirectly boost Intel's chip sales. But those products never gained market traction, said Rob Enderle, an independent technology analyst in Silicon Valley.
The company folded that division in late 2001. "This is Intel doing consumer electronics right, " Enderle said. "They were building toys, but now they are back to the basics of making the building blocks of the technology... this time they are on top of where the market seems to be going. " A further sign that the consumer electronics market holds significant allure, Enderle said, is the fact that PC industry leader Dell Computer is working on a line of consumer products. Dell has scheduled a major announcement on its consumer strategy for Thursday. A company spokesman would provide no further details. About the Writer The Bee's Clint Swett can be reached at (916) 321 - 1976 or.
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Research essay sample on Consumer Electronics Technological Progress
