Intel’s Bullish Internet Forecast

Moving quickly to dismiss the feelings of doom and gloom pervading the
technology industry, Intel CEO Craig Barrrett kicked off his company’s
Developers Forum in San Jose with a primarily bullish forecast that focused
more on the Internet than the microprocessors for which Intel is best known.

“‘The PC is dead’; ‘corporate IT spending is down’; ‘there’s a dot com meltdown.’
You can get totally depressed reading this,” says Barrett. “There absolutely
is a slowdown in U.S. manufacturing. What’s important is the future, the
digital world…and the build out of the Internet which is in its infancy.”

Barrett went on to assert that “technology doesn’t slow down” and that
innovative companies will help the U.S. grow out of what he called the
recession of the current economy. “I’ve been around this industry for 27
years, and the only way to prepare for the inevitable upswing is not by
saving, but by developing breakthrough technology. The Internet is the
growth engine going forward. It is going to be our future.”

The Intel exec says that America is still the center of Internet activity
and commerce, and that the primary growth engine is the business to business
market. “Only a very small fraction of Internet activity is in business to
consumer where the meltdown has taken place,” says Barrett. Business to
business is where you’re getting the most activity and wherever you look
around the world there’s an Internet build out.”

Intel has put its money behind its assertions. The company’s venture capital
arm invested some one billion dollars in companies this past year, and Intel
itself spends over $4 billion in research and development.


As Intel reaches out to new markets in the Internet it remains tightly tied
to its longtime partner Microsoft. During the keynote, Barrett brought out
Microsoft’s Group VP of Platforms Jim Allchin to demo the forthcoming
Windows XP operating system now in beta. The tantalizing demo used a PC
based on a 1.4 Gigahertz Pentium 4 with 256 Megabytes of RAM.

Windows XP features a blank Welcome screen devoid of icons (which the user
can add if desired). A mouse click activates pop up menus of commonly used
tasks. In the demo, Allchin ran a compile of the XP software development kit
in one window, ran a video in another window and the graphics intensive Tomb
Raiders game in another window, all running without noticeable delay.

“Windows XP takes the user through all they want to do whether it’s
connecting to other devices or services,” says Allchin . “So you’re not left
in the lurch as to, for example, how to get a digital photo into your PC and
share it on the Internet.”

Intel VP Paul Otellini says there are plenty of reasons for consumers and
business to want the faster processing power of Pentium 4 even if the PC is
primarily used to connect to the Internet. “There is a myth out there that
you can never get better performance without broadband,” says Otellini. He
gave some examples of how Intel’s latest processor can enrich the Internet
experience. For example, the Pentium 4 can use the latest MPEG 4 standard
for video to capture, decompress and playback video files much quicker than
earlier systems connected to standard dial up lines. “Now we can start
thinking about downloading movies without broadband,” says Otellini.

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