Intel announced the release of the new i845-chipset for their flagship Pentium 4 processors on Monday September 10, 2001. The i845 allows for Original Equipment Manufacturers (OEMs) to build PCs using the Pentium 4 CPU and SDRAM memory, rather than the more expensive Rambus DRAM (RDRAM) memory required by previous Pentium 4 chipsets. Intel stock closed the day on the upside by almost twenty cents on the news (Rambus, the inventors and marketers behind RDRAM, were down 25 cents). Aside from Wall StreetÕs modest nod to the i845 announcement, nobody cared. Does anyone in the world not realize what has just happened? Pentium 4 processors are the fastest commercially available CPUs for personal computing on the market and PCs that use them just got cheaper! Computers based on IntelÕs previous Pentium 4-chipset are more expensive due to the higher cost of the RDRAM memory modules. These RDRAM memory modules cost an average of $50 (US) more than the exact same SDRAM memory modules. Adding to the cost was the fact that RDRAM had to be installed in pairs (two memory modules at a time) rather than in single module setups like SDRAM. If you wanted 128MB of RDRAM, you had to buy two 64MB modules that worked out to actually be around $10 cheaper than one 128MB module. Intel was roundly criticized by customers for the RDRAM/Pentium 4 decision because of the high cost and marginal performance gains with RDRAM. In an effort to win back customers, Intel created the i845-chipset to utilize the cheaper and more popular SDRAM memory. Undoubtedly there were some in IntelÕs ranks that looked at this as a step backward, since Intel (with help from Rambus) had spent a lot of time, effort and money trying to convince consumers that the extra money spent on RDRAM would be worth it. Conversely, Intel as a whole must have realized that Rambus had sold them on an idea that still needed some work and knew that SDRAM was still a viable memory technology. I can say from personal experience with my own computer at home and in various labs where I have seen RDRAM and SDRAM systems working side by side, IntelÕs decision to go back to SDRAM was a good one. Memory prices for RDRAM have dropped considerably in the past year but these price decreases are nothing when compared to SDRAM. September 2000 prices for 256MB of RDRAM would have easily cost a consumer $600 while the same amount of SDRAM was $240. A year later, the same RDRAM module is down to $90 but the SDRAM is at an all time low of $26! Major OEMs like Dell, HP-Compaq and Gateway will soon offer fully loaded PCs with Pentium 4/SDRAM configurations for $799 and under. One reason corporate Information Technology (IT) executives gave for not immediately rushing out to buy PCs with Pentium 4s was because they were too expensive. Maybe a year ago that was true but it would be hard to say the same thing today with a straight face. Why are people not clamoring for the incredible deals on Pentium 4-based computers? The easiest answer is that spending on IT expenses has halted until the economy picks up. Businesses are not spending money on new PCs because the computers they bought two years ago still work fine. Home users are not buying new PCs for the same reason. One IT manager for a law firm told me last week ÒThereÕs no reason to buy these 2-GHz processors and 40-inch monitors other than playing games on your computer.Ó The law firmÕs PCs were a couple of years old but sufficiently powerful to do the tasks required of them. To corporate customers, the idea of a newer, faster computer is all about what you can do with it to make your company more productive. If your onsite IT staff bill you for overtime and the extra five hours was spend playing ÒTom ClancyÕs Rogue SpearÓ against marketing, itÕs not a good idea to buy everyone in the office newer faster computers. The idea of Òthe computer is fast enoughÓ can apply to home users but the main thing is the wider array of tasks the family PC must accomplish. A corporate PC is for company email and report writing ø the most basic of tasks. If you have a computer in your home and you have a family, you know that computer time is usually rationed amongst family members. Your wife has to pay bills and handle the expenses on the computer, your daughter has to chat online with the guys from a new boy band, your son has to find out the latest scores from around the league and youÕve write your column for a leading international online news websiteÉ and other things. Your computer may be Òfast enoughÓ to do all this, but the fact is that everyone in the house needs to use that one computer. Are you sure you donÕt need another computer? From a software standpoint, many feel that word processing and Internet experiences are unaffected by more powerful processors like the Pentium 4 or AMDÕs excellent competing processor, the Athlon. However, MicrosoftÕs newest word processor offers voice activation and dictation features. As broadband Internet use becomes more prevalent, faster PCs will be needed to take advantage of high-end multimedia available over the Internet. The clunky word processors and web browsers from last year may run fine on your two year-old PC, but if you want to live like ÒThe JetsonsÓ (minus the flying car) youÕll need to get that 2-GHz processor. Economic news has been gruesome, but there are signs that things will pick up in 2002. Demand for PCs is low now, but it will snap back because PC prices are lower than ever. IntelÕs i845-chipset, faster Pentium 4 processors, a new version of Windows from Microsoft coming in the fall means that consumers have a lot to choose from in an increasingly affordable cyber-candy store. Even so, corporate IT managers and home users say that they do not have the money to buy new systems right now. I think they may just be playing it smart. They might just be waiting until Christmas/Hanukkah for the PC prices to drop even more.

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