AMD ups the stakes with byte overkill

Will Intel follow AMD into the 64-bit computing market or will it remain steadfast in its attempt to stamp out this new trend, asks Tom Foremski

Jason Fister (35) is considering buying a 64-bit personal computer; and although the San Francisco healthcare worker knows he probably does not need one, it sounds "cutting edge" to him.

Many other people will be doing the same thing, as Advanced Micro Devices (AMD), Intel's chief rival in PC microprocessors, this week launches its Athlon 64 chip and tries to persuade the computer-buying public that 64 bits are better than the standard 32 found in most of today's desktop machines.

The attraction of 64-bit chips is essentially their speed - the ability to process data in 64-bit chunks, rather than the standard 32. This suits them to heavy-duty jobs in which they are needed to "address" large banks of memory chips, quickly retrieving and storing huge volumes of data. This scale of performance is necessary only in large servers, the backbones of big corporate systems - a world away from most desktop PCs, which AMD now has its eye on.

In fact, 64-bit computing has already arrived in the desktop market. Apple Computer - known for the smart marketing that has turned it into a trendsetter despite a market share of just 4 per cent - launched its "G5" 64-bit machine earlier this year, and it quickly became a hot seller.

Intel, the world's biggest chip maker, is keen to stamp out this trend; its message is that 32-bit chips are all you need and 64-bit represent overkill for most PC users. Intel has already launched its own 64-bit chip, the Itanium, but it is designed for servers and is not suited to desktop machines because it is expensive and does not run PC software very well.

"To fully make use of a 64-bit PC, you would need to add thousands of dollars in memory-chip costs," says Mr Louis Burns, head of the desktop platform at Intel. Most PCs sold today come with one gigabyte or less of so-called "fast" memory - half the level at which 64-bit capabilities start to make sense. Moreover, Microsoft will not release a version of its Windows operating software suitable for the new chips until the end of the year and there is no mainstream 64-bit PC software available so far.

So why would computer buyers want to stump up for a PC with one of AMD's new microprocessors in it? Part of the answer is that AMD's chip is designed to run current PC software, which is all 32-bit, as comfortably as it will run next-generation 64-bit software, says Mr Nathan Brookwood, head of Insight 64, a US market research company. "You would buy an Athlon 64 PC because of its 32-bit performance, which is very impressive," he says.

Second, buying one of the new machines will enable computer users to take advantage when new software written for 64-bit machines becomes widely available. Although many people are computer-wise and know that 64-bit capability is largely useless for now, says Mr Brookwood, "it provides them with a bit of future insurance, especially since people hang on to their PCs for longer these days".

Last, with national retail chains in the US such as Costco advertising PCs that incorporate AMD's Athlon 64 chip and many other features for as little as $1,400, a 64-bit desktop PC is within the reach of many buyers.

This may not be enough to convince most people. But Mr Richard Baker, AMD's marketing manager, says there is one particular group of PC users who are excited by the new machines: hard-core PC computer gamers who value the advance in computer graphics that a faster microprocessor makes possible. AMD believes that once PC games written for 64-bit machines become widely available, the strengths of its chips will give them a strong position among the gaming community.

"PC game players are always at the leading edge and they always want the fastest PCs available," says Mr Baker. He expects a spill-over effect into mainstream PC markets if this influential group can be won over.Even the US army has jumped on the 64-bit PC games bandwagon, with a version of its America's Army video game, which is used to help in its recruitment efforts.

But to succeed in PC gaming, AMD needed an ally; and it found one in Nvidia, a leading graphics chip company. Nvidia is highly regarded in the PC gaming community and has developed high-performance graphics chips tuned for the Athlon 64.

Another user that needs 64-bit desktop PCs is Hollywood. The film industry is seeking ever more powerful desktop systems, and the complexity of the images in special-effects shots means large amounts of data need to be accessed, processed and stored - the sort of job a 64-bit PC is designed to do.

Mental Images, a leading Germany-based maker of graphics processing programs, is one of the companies targeting Hollywood and related markets with a 64-bit version of its software.

But can such niche markets provide AMD with a large enough pool of customers to make its Athlon 64 a success? Some Wall Street analysts believe they can. Mr John Lau, analyst at Banc of America Securities, says Asian manufacturers that supply most of the "guts" of today's PCs are showing considerable interest in the Athlon 64 for high-end PCs.

That leaves the $64,000 question for AMD's push into 64-bit computing: will Intel enter the market with a competing product? When Transmeta four years ago introduced a low-power chip for the new notebook computers, Intel followed with a similar device, despite having vociferously told the world that such a chip was not needed. But it will not be quite as easy this time.- (Financial Times Service)