Digital Equipment Making Chips To Challenge Intel >DEC INTC
Dow Jones News Service ~ March 16, 1997 ~ 5:00 pm EST
NEW YORK (Dow Jones)--Digital Equipment Corp. (DEC) Monday is introducing a new microprocessor chip that can double the performance of personal computers, posing a challenge to widely used Pentium chips from Intel Corp. (INTC).
Digital said that PCs running its new-version Alpha chips will start at under $2,600 - comparable to Pentium-based machines.
Digital is aiming its new microprocessor at corporate desktop PCs that run on Microsoft's Windows NT operating system. Currently, the Maynard, Mass.-based company's Alpha microprocessors are the ''brains'' in more powerful business computers.
Manufacturers that plan to build PCs with the new chips beginning in July are Digital, which already makes Intel-based PCs; Germany-based Vobis Microcomputer AG; and Enorex Microsystems Inc., a New Jersey company started six months ago in anticipation of the new Alpha chip.
Digital hopes that other makers will follow, fueled by an increasing availability of software. Currently, nearly one-third of the roughly 6,000 software programs designed for Pentium-based machines using the Windows NT operating system also can run on Alpha-based PCs, Digital said.
Other software can be run in ''emulation'' programs, which allow the chip to run software not written for it but reduces the program's speed.
Pippa Jollie, marketing manager for the Alpha 21164PC microprocessor, said that Alpha-based PCs would be particularly useful running graphics-heavy programs. For example, graphics would appear crisper and can be created more quickly.
Still, some analysts said Digital would have work hard to gain PC market share from Intel. Many PC makers may be hesitant to upset their main supplier of chips, and Intel has created brand loyalty among users with its ''Intel Inside'' marketing campaign.
''This is going to be the year Intel gets some serious challenges. But there is more to winning a technology war than just getting the technology. Intel has a lot of market muscle,'' said Daniel Niles, a semiconductor industry analyst at Robertson Stephens & Co., based in San Francisco.
An Intel spokesman acknowledged the threat.
''There are a lot of competitors out there. Like any other competitor, we will take them seriously,'' said Chuck Mulloy, a spokesman for Intel, based in Santa Clara, Calif.
(END) DOW JONES NEWS 03-16-97
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