Intel’s New Chip for Notebooks

Compaq and Intel team up in server appliances, JDS Uniphase lays off workers.
Joseph RadiganJanuary 30, 2001

On Tuesday, Intel will unveil two energy- saving versions of its Pentium III and Celeron microprocessors for notebook computers, according to wire service reports.

Dow Jones News reported that the chips are targeted for lightweight notebooks weighing less than three pounds, often referred to as subnotebooks. One, the Pentium III, is the industry’s first to operate at a 300 Mhz speed under 1 volt while consuming less than a half watt of power. The less power drained by the chip, the longer the battery lasts.

The chips fill a gap in Intel’s product line and put it on better footing to compete with Transmeta, a start-up chipmaker that has gotten a good deal of publicity in the past year for its semiconductors that target the low power consumption end of the market. Earlier this month, Transmeta joined forces with RLX Technologies, a start-up manufacturer of network servers led by former senior executives of Compaq Computer.

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Server Appliance Teamwork

Intel is teaming up with Compaq Computer to go after the server appliance market. On Monday, Compaq said it’s selling Intel’s NetStructure XML, SSL, and VPN appliances in addition to its own TaskSmart line of appliance servers.

The two companies will also collaborate on product development while attacking a market that’s estimated to grow to $16.7 billion by 2004. In the coming months, Compaq will also work with Intel to migrate some Intel NetStructure appliances to Compaq’s TaskSmart line.

The Intel products to be added to Compaq’s product line include e-Commerce accelerators, which restore speed to servers by offloading the encryption and decryption of Web traffic, XML accelerators, which optimize B2B transactions, and virtual private networking systems for E-business networks.

Nowhere to Hide

While Internet server appliances appear healthy, the same can’t be said for fiber optic components. Late Monday, JDS Uniphase confirmed to Reuters it had laid off 700 contract manufacturing staff.

JDS Uniphase said the cuts were the result of uncertainty over future customer demand and were also part of a streamlining effort to boost efficiency. Last week, when the company reported its financial results, it also trimmed back its forecasts and blamed near-term uncertainty on spending plans by telecom carriers and inventory adjustments.

The company said third-quarter revenue was expected to grow between seven and 10 percent above the second quarter, a dip from expectations of about 11 percent to 12 percent. It also said revenue growth for 2001 would come in at the low end of its previous forecast of 115 percent to 120 percent.

Following the cuts at the company’s Ottawa area manufacturing plant, JDS Uniphase has a total of 10,000 employees.

More ominous are the implications for the rest of the technology sector. Only a year ago, fiber-optic components were in such demand that they were said to be virtually immune to a slowdown.

Fiber-optics are indispensable for high-speed networks, and with the Internet infrastructure being built at such a breakneck pace, component makers like JDS Uniphase and Corning couldn’t build them fast enough. But that’s not the case this year.

EDS Jumps into the Supply Chain

EDS said it is beginning a joint venture with Structural Dynamics Research, or SDRC, to pursue the E-business collaboration market, which is used to automate product development and supply chain management.

Under the terms of the agreement, EDS will implement and integrate SDRC’s E-Business Collaboration software products, including Metaphase, Metaphase Express product knowledge management systems, and Accelis E-business integration software. EDS will also provide consulting and implementation resources to SDRC.

In addition, EDS and SDRC will join forces in the marketing and sales areas. The two companies expect the deal to generate $100 million in revenue over the next three years.

Supply-chain management has been one of the hot buzzwords for the B2B sector, as more companies look to link their internal inventory, procurement, and invoicing systems to Internet exchanges and B2B marketplaces.

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