Pixel Wars

'Intel Inside' now outside, Viiv is here, and the emerging multimedia

battlefield is overflowing with competitors

The new digital revolution is paved with a

preponderance of gadgets, networks and protocols stampeding to make sense of the

consumer's multimedia craze. The slivers of silicon from Intel and AMD, that

have become the hot inner core of millions of computers, have over the last

three years been finetuned to carry more data and process them faster. The two

chip maker rivals are leading the new multimedia thrust and have set the stage

for the next chapter of chip wars in 2006. This will involve dual-core

processors and chipsets designed to speed the handling of multimedia files in

different formats and reproduce them in high-definition video and surround

sound.

Intel's processor names always recalled the chiselled tone

of base metals—like Itanium and Pentium, maybe, even allusions to an inert gas

(Xeon). 'Whitefield', christened after Bangalore's famed IT corridor, is

history now when Intel announced the culmination of the chip's eventual demise

late last year. It was a blow for the Indian operations of the Santa Clara

giant, but for the engineering workforce of about 2,800 people in Bangalore, the

thrill of working on diverse segments like telecom, automotive, and multimedia

IPs, more than made up for the setback.

And, how about a new multimedia brand, with active support

from Bill Gates? The Microsoft chief went so far as to extol the virtues of the

digital home standing against 30-foot backdrops of the Viiv logo during the

Microsoft Developers Conference in December last year. Clearly, chipmakers are

set to benefit as high-definition televisions and entertainment centers have

dependent on computer chips, tuned to multimedia uses. Manufacturers and

consumer electronics companies stand to benefit from the new connectivity

paradigms emerging.

While Intel announced its Viiv plans, rival AMD is chimed in

with a similar-sounding AMD Live!, and Texas Instruments plans to push its DLP

television technology and Da Vinci multimedia chips. TI was among the earliest

to make inroads into consumer electronics with DSP chips that were an ideal

solution for manufacturers seeking faster processing of multimedia content. Its

DLP (Digital Light Processing) technology could be a strong alternative to the

current LCD and plasma televisions. And, Da Vinci multimedia chips, without

'Da Vinci Inside' logos, could make the circuit board another hotbed of

competition. But then, TI's digital consumer brand foray, if in the pipeline,

does not have the in-your-face informality (or, familiarity) of an Intel or AMD

brand. The advantage for TI is its stronger mindshare with consumer electronics

majors.

Samsung has long announced its GDDR3 range of multimedia

memory chips with 7 GB plus processing capabilities to whet the gamer's

appetite.

In a world where Sony or Samsung have become synonymous with

stylish devices for the home and the road, effective branding strategies will be

the key to success of these ambitious chip offerings—ordnance for the new

pixel wars.

Connectivity Vitamin



Viiv might be a departure for Intel in the branding space, and the product

strategy does not sound as disruptive as Centrino did when it was first

announced in 2001. This is because talk of convergence in the digital

entertainment space has been literally in the air for some time now, with the

proliferation of digital devices, while Microsoft's Windows XP Media Center

launched last year is already making waves with discerning buyers. So what's

new? Besides, the general perception is that Viiv will not be able to really

help Media Center lure the 'budget' PC buyer in emerging economies, and will

be confined to multimedia-crazy geographies.

Intel could eventually find the established players in

consumer electronics less welcoming and even unwilling to have the Viiv badge

displayed alongside their own brand, say reports. Sustained co-operation on the

new platform will be difficult. In the event of such situations, Intel will

mainly bank on innovations which it has championed—such as USB connectivity,

to cement the support of its partners. That would make sense, because Intel is

in the unique position of being able to assure users of interoperability as

content is exchanged between devices made by different manufacturers.

Intel's experience in assuring interoperability is almost

unrivalled in the industry. Viiv's real success will ride on this. However, on

PCs running the Media Center software, where Viiv will first appear, Intel will

have to contend with rival platform AMD Live! which will be equally

adept-handling multimedia files in different formats.

AMD's marketing route will be far subdued in comparison with

Intel's, but R&D and content partnerships started in 2005 will be a key

cornerstone in joining the new pixel wars. AMD is trying to bring together

partners such as set-top box makers where it can help combine the broadcast

world with what comes over the broadband network.

The challenge for Intel and AMD will be to tackle customers

on an individual basis, something they have not done in the PC world.

As Intel, embarks on its official offensive into consumer

electronics with the Viiv brand, AMD will heat up its digital media offerings

via AMD Live! towards the middle of 2006. The content alliances which AMD forges

with media groups around the world will be key to pushing its Digital Media

Vision into the digital home. The Athlon-powered AMD Live! suite of consumer

multimedia desktop and notebook PCs is due for a mid-2006 launch. But by then,

many new Windows Media Center customers could be lost, when Viiv is expected to

be on the CPUs of every sixth Intel consumer. AMD will then have to recoup by

augmenting its reseller network in gaming and multimedia-crazy nations like

Australia, Philippines, Japan and South Korea.

AMD's customer-centric approach in the enterprise has

yielded dividends for the Opteron over the last two years. The consumer

electronics push which both AMD and rival Intel now embark on entails

innovative, complementary, industry-friendly solutions that enhance the devices

already accepted and used by consumers today.

The idea, as AMD sums up, is to transform consumer

entertainment from '2 foot' PC interactive experiences into '10 foot'

extended PC entertainment experiences—streaming music through entertainment

centers, viewing and sharing photos on the TV, burning recorded TV shows,

videos, music and pictures to a DVD or CD, or transfer this same content to a

notebook, MP3, portable media player or PDA. The Web 2.0 Internet services

revolution is not where Gates is in the thick of. But he is looking at seizing

some of the action through the Microsoft-Intel-AMD digital media franchise.

Value Pals



Both Intel and AMD paid due attention in 2005 to pursuing engineering and IP

development with the key consumer electronics constituents like Philips, Sony,

Motorola, Broadcom, ST Microelectronics, Samsung, NVidia and Mitsubishi who are

prime stakeholders in the digital home revolution. After all, we are talking of

merging home computing and entertainment, of the dawn of the GB-crunching GPU

(Graphics Processing Unit), of outrunning the formidable idiot box-zilla by

mixing 64-bit channel-surfing with the ubiquitous reach of the Internet, aren't

we? Not to mention filliping the digital consumer's ability to connect, store,

distribute, access and enjoy digital media content in multiple rooms throughout

his home and even enjoy it on the go, virtually anytime, anywhere.

Add all this to Microsoft's satisfaction that its Media

Center Edition and Xbox 360 are gaining momentum, and the implications of the

multimedia love triangle are all too clear. Gates will be keen to push Viiv and

AMD Live! with equal zeal because many high-end consumers are, by Microsoft's

claims, responding to the combination of powerful AMD64 technology, Media Center

PCs and the Xbox 360 system.

As for Apple, its iPod success is now the stuff of market

legend, but Microsoft will give it stiff competition. In its continuing romance

with Sony, Microsoft now plans to offer a HD-DVD video player as an accessory to

its XBox 360 gaming console. Cisco, the maker of Linksys wireless. Internet

hubs, has also made a bold foray into the living room with its $6.9 bn purchase

of Scientific Atlanta, a maker of set-top cable television boxes. Yahoo! has

announced plans to move beyond the browser and offer content on television sets

and mobile phones.

All the above is quality competition. Apple's advantage in

these pixel wars will be the brand buzz and the so-called 'halo effect'

around the iPod, not its 3% Macintosh marketshare worldwide. iPods, their

accessories, and the accompanying iTunes Music Store accounted for 40% of the

company's revenues in the fiscal fourth quarter. The iPod family, which includes

the recently launched iPod Nano and Video iPod, has captured the lion's share of

the global portable media player market, while iTunes songs account for more

than 80% of paid music downloads. Therein, lies the opportunity.

Morgan Stanley says that the growing ranks of iPod owners

are three times more likely to consider purchasing Macintosh computers than

non-owners. Still, upcoming competitive device launches will have Steve Jobs on

his toes in 2006.

Power Strokes



The extended PC is the playground for the emerging power game too. We are

not talking of the proposed MMORG (Massively Multiplayer Online Reality Games)

gaming delivery capabilites of Viiv, Windows, Mac OS X or AMD Live!; we are

talking of the 'power' equation which is being slowly built into systems

hardware sensibilities.

Consumers will increasingly demand power-efficient hardware.

Enterprises will demand the same too, because its good for their bottomlines. As

Sun COO Jonathan Schwartz says, "Consumers want to save money as much as

your CFO (or CIO). Voters want a cleaner world as much as businesses want

competitive advantage." He points out that in a world where computers draw

enormous amounts of power, and throw off huge amounts of lead, the world is now

required to build plants and install power hungry air-conditioners.

Power-friendly systems with high throughput, lower heat build-up and

'eyeball' retaining qualities will be in demand.

Viiv, Xeon, Niagara, Galaxy, Opteron will be key

stakeholders in the power game to be the 'coolest' of them all. Many Watts

saved over a year is a lot of money saved. The digital consumer's soaring

demands may be tempered by the need to save his hard-earned money by burning

pixels at lesser cost.

That said, the demand for digital devices that stream,

record, play and store digital content can only go through the roof where

prices, power consumption and power costs are reasonable and taxes bearable. But

once home entertainment evolves into a sustainable franchise, graphics, video

and connectivity technology will bring home computing devices on even keel with

enterprise computing networks.

Intel, AMD, Microsoft and Apple articulated the digital

consumer shift in the IT industry in 2005, and 2006 will offer them wider

opportunities to come up with innovative devices, content, and software than

ever before. In 2006, the IT giants are wagging the tail of the big technology

dog with the hope that the tail will soon wag them. People, markets and plain

economics will now do their thing.

Ravi Menon   



ravim@cybermedia.co.in