September 16, 1999 2:20 PM PDT
Rambus PCs will lag behind debut of memory system
Intel is scheduled to debut its chipset that supports Rambus on September 27. However, companies such as Dell and Hewlett-Packard apparently will not have systems ready for several weeks. Typically, PC manufacturers have products in the pipeline when an eagerly anticipated technology is first released.
The lag is another bump in the road for Rambus. Intel, the biggest backer of the next-generation memory, has already delayed the chipset, pushing it back from June to September. In addition, memory manufacturers have complained about the high costs of manufacturing the memory chips.
"Basically, Intel is conceding that some [computer manufacturers] aren't going to be shipping systems," said Peter Glaskowsky, an analyst with MicroDesign Resources. One reason for the delay could be that manufacturers want to wait for the debut in October of Intel's new Coppermine CPU, he added.
Intel has anointed Rambus as the next-generation memory technology to replace the current standard, called SDRAM. Largely on the basis of Intel's support, Rambus shares have risen to give the company a market capitalization of more than $2 billion.
But in order to use Rambus memory, a computer needs a supporting electronics technology called a chipset, which Intel supplies. Intel's newest chipset, code-named Camino and officially called the 820, is the first to support Rambus and will debut September 27, sources said.
While HP will announce its first Rambus-powered systems on September 20, it won't begin shipping them in volume until at least mid-October, said Mark Bony, product manager of HP's Kayak workstation line. HP is rebuilding its entire product line around two new models, the XM and the XU.
In addition, sources said Dell--typically the company most eager to embrace Intel's chips and one of the biggest Rambus supporters--won't debut its first Rambus systems until a month after Intel's chipset announcement. Dell declined to comment on unannounced products.
One source said there were technological problems causing the delay, but Glaskowsky said Intel insiders told him "there are no known problems on the hardware." Intel declined to comment on whether such a problem existed.
"We've said we'll introduce the Intel 820 in late September, and we're on schedule to do so," said spokesman Dan Francisco.
However, Francisco added, "System manufacturers will introduce on their own schedules."
Glaskowsky said it's reasonable for computer manufacturers to wait before unveiling Rambus systems. "Even though the chipset is available, it makes sense for OEMs [the original equipment manufacturers who build computers] to do a single combined release of Camino and Coppermine in October," he said.
Coppermine is the next model in the Pentium line. With a large amount of high-speed "cache" memory, it's expected to be speedy. Intel delayed its arrival from September to November, but last month moved the schedule up to October.
The fourth quarter is an awkward time to introduce new systems to the corporate market, said Steve Cullen, an analyst with Cahners In-Stat Group. With manufacturers concentrating on home-oriented systems for the holiday season and businesses worrying about the Y2K problem, "December seems like a difficult time to ship a new system," Cullen said.
Because mainstream memory prices were so low for so long, Cahners several weeks ago lowered its projections from 5 million to 3 million for how many relatively expensive Rambus systems will ship this year, Cullen said.
"SDRAM prices started tanking in the spring. The [Rambus] prices didn't tank along with them, so the price difference just mushroomed," he said.
A 128-MB system with Rambus will cost manufacturers about $100 to $200 more to build than a comparable SDRAM system, Glaskowsky said. The cost difference will be greater at the retail level.
"These machines aren't going to look attractive except to the people who want absolutely the highest model," he said. "Gamers are probably going to be the strongest market."
SDRAM prices now are on the rise again, Cullen noted.
Even though there have been problems with Rambus, many analysts still expect it to win out in the long run, bringing in lots of royalty revenue for the company and justifying its lofty stock price.
A performance problem?
A recent study by Bert McComas of InQuest Market Research concluded that Rambus won't live up to the performance benefits that Rambus, Intel, and others have claimed. Extrapolating from data that Dell released at the Intel Developers' Forum in August, McComas said Rambus systems were 25 percent slower than conventional SDRAM systems running ordinary Microsoft Office 2000 applications.
Dell disagreed with the interpretation, saying that the numbers had been taken out of context. "He misrepresented some numbers," said Dell spokesman Jon Weisblatt.
McComas defended the comparison, saying that a Dell representative told the audience that the tests were done on systems identically configured except one used Rambus and the other used conventional SDRAM. "I think it's real," McComas said. He said the performance gap comes from the increased "latency" of Rambus--the CPU must wait longer for information to arrive from memory.
Glaskowsky said he didn't trust McComas' numbers because there are too many ways the two machines could have differed. "You cannot make these straight-line comparisons that easily," he said.
"The performance benefits are kind of marginal right now," added Insight 64 analyst Nathan Brookwood. "I think that in the long run, the Rambus strategy is clearly going to be the right one," he said.