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Wednesday, January 19, 2005
Intel updates Centrino notebook computer chips

Intel updated its line of Centrino notebook computer chips on Wednesday with higher speeds and improved multimedia features, a move the company hopes will further propel one of its fastest-growing businesses.

The chips, which had been delayed for a few months because of a technical glitch, are expected to appear in 80 notebook models immediately, and 150 by year-end, Intel said. Pricing and other details are to be disclosed at a marketing event later on Wednesday.

Backed by a massive global advertising push, Centrino Mobile Technology has been viewed by analysts as a big hit for Intel, allowing it to sell a bundle of three chips -- a microprocessor, a supporting chip set, and a wireless chip -- under a single, widely recognized brand. PC makers cannot use the Centrino brand unless they buy the entire bundle of Intel chips.

The brand's success has attracted competition from archrival Advanced Micro Devices Inc., whose Turion 64 Mobile Technology chips, to be released in the first half of the year, will also go after the highly profitable thin-and-light notebook segment.

Intel, however, commands about 85 percent of the notebook microprocessor market.

"Notebook computing, with its higher margins and better growth potential, is another important battleground for Intel versus AMD," said Andrew Root, an analyst with Goldman Sachs, in a recent note to clients.

WI-FI spurt

The launch of the Centrino brand in 2003, backed by hundreds of millions of dollars in marketing and advertising, has encouraged, or at least coincided with, a spurt in notebook sales and explosive growth in the use of Wi-Fi, a high-speed wireless networking technology.

The new chips that make up the updated Centrino brand, which had been codenamed "Sonoma," include a more capable Wi-Fi radio, a faster microprocessor, and a chip set with more powerful integrated graphics and sound capabilities. It also includes support for faster connections to peripherals like external data storage through a technology called PCI Express.

The package of chips will become the centerpiece of Intel's mobility group, one of five new business organizations created in a corporate restructuring announced on Monday.

The mobility group will also include Intel's chips for cellular phones, which have largely failed to displace competition from established cellular chip makers such as Texas Instruments Inc. N>

Unlike Intel, AMD says it has no plans to require its customers to buy a package of chips in order to use the Turion brand. AMD said it leaves it to customers to select a wireless chip and a chip set from one of dozens of chip suppliers.

Also, Turion will be able to accommodate vast amounts of memory thanks to a technology called 64-bit computing, something Intel has said is premature for the notebook market. For these reasons, AMD has positioned its Turion brand as something of an "anti-Centrino," said Root at Goldman Sachs.

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