January 27, 2006 1:30 PM PST
Intel's Core Duo health causes PC industry pain
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Intel formally unveiled the new Core Duo processor at the Consumer Electronics Show earlier this month. Acer and Sony have started shipping a few notebooks that feature the dual-core processor, formerly known by its Yonah code name. But Gateway, Hewlett-Packard, Apple Computer, Lenovo and Dell are still waiting to release their Core Duo notebooks, even though they have announced the specifications and pricing.
Acer is promoting its TravelMate 4202 and 8204 notebooks at CompUSA stores, though the units were out of stock at most stores, according to CompUSA's call center. Sony's FE-590 series notebooks are also listed on CompUSA's Web site as shipping but are out of stock. Those notebooks have a three- to five-day shipping date listed on Sony's Web site.
Comparable notebooks from Dell and Gateway won't ship until the first week of February, based on those companies' Web sites, while Apple's MacBook Pro won't appear in Apple stores until the second week of February, according to a sales representative at the company's San Francisco store. HP is bringing up the rear, with its Core Duo notebook not scheduled to ship until Feb. 24.
Intel traditionally favors its close partners, such as Dell, with early allocations of new processors. But a change in the launch date for Core Duo notebooks in the middle of the development process, according to PC industry sources familiar with Intel's plans, caused a free-for-all in the race to launch Core Duo notebooks.
The Core Duo processor requires PC vendors to buy and configure new motherboards. This meant that product development teams needed a little more time than usual to certify the new notebooks, said Roger Kay, president of Endpoint Technologies Associates.
But Intel decided about two months into a typical nine-month development process, around late summer 2005, to accelerate the launch date for the Core Duo processor to January instead of the original March target, according to sources familiar with the company's planning. The company was delighted with the better-than-expected results from its new 65-nanometer manufacturing technology and was ready with Core Duo chips in the fourth quarter of 2005, executives said in December. But the company was also facing new competitive pressure from Advanced Micro Devices in the notebook market, an area where Intel had kept the smaller company from making gains until late last year.
That decision, however, left PC vendors scrambling to get their notebooks ready as close to the new early January launch date as possible. Smaller vendors like Acer were able to be more aggressive, while larger vendors like Dell and HP needed more time to qualify their notebooks. Apple, which usually prides itself on having systems ready to ship the day they are announced, also had to wait its turn like the rest of the PC industry.
In a business where margins are tight, changes in product development plans can make for a lot of stress at PC companies, said Stephen Baker, director of industry analysis at NPD Techworld. The transition to dual-core chips makes for new design challenges at PC companies, just as they are finally wrapping up the transition to the PCI Express interconnect technology, he said.
Smaller vendors might be able to steal some revenue from their larger competitors by getting out early, but the limited volumes of the early retail launches could backfire by annoying consumers who arrive at a store to pick up a notebook that isn't there, said Nicki D'Onofrio, an analyst with Current Analysis.
"The lack of the hyped-up Core Duo will be frustrating to consumers but will not have a significant negative impact on any one vendor since no one has come to market with a full-blown Core Duo product launch," D'Onofrio said.
Intel and Dell declined to comment about the launch schedule, but HP said in a statement that an earlier ship date is possible.
The Core Duo kicks off what promises to be a full year of transitions for notebook developers. Right on the heels of the Core Duo processor comes Merom, a 64-bit dual-core notebook chip based on Intel's so-called "next-generation architecture," a new low-power set of chip design philosophies. That chip will arrive in the second half of this year. And Microsoft is still scheduled to ship Vista, the successor to Windows XP, by the end of the year.
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