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Chip's Diversify
The
largest computer chip makers are doing something odd: they
are working hard to move away from the production of computer
chips. That's right, Intel, AMD, Cyprus, and Texas Instruments
are moving away from PC's. Over the past decade these
companies have focused intently on making the fastest possible
computer chips, and now they are recognizing that they may
have been too narrowly focused. An amazing fact is glaring
them in the face: the sale of Internet appliances will surpass
the sale of personal computers by 2002, and by 2005 computer
sales will be flat. The PC chip makers aren't going to blow
away, they are just going to evolve. A few short years
ago the only electronic devices storing information or accessing
the Internet were desktop computers. The only way to communicate
with others was in-person or with a corded phone. The definitions
have become blurred. Now cell phones access the Internet.
Electronic maps in our cars tell us when we've taken a wrong
turn. Music can be downloaded from the Internet and stored
in digital form rather than on tape. PDA's (Personal Digital
Assistants, like the Palm handheld devices) store information,
and can access the Internet on a train or sitting in a café.
As the
volume of electronic devices storing information and accessing
the Internet shifts away from personal computers these computer
chip makers are shifting in the direction of these new devices
and other ventures. Texas Instruments up to a couple of years
ago use to make computer chips, now they are one of the premier
communication chip makers and no longer are in the PC chip
market. Two weeks ago Intel released a chip-based personal
music device, similar to a Sony Walkman, at the annual Consumer
Electronics Show in Las Vegas. The device uses a new music-processing
chip developed in-house at Intel. Intel is also involved in
venture capital investing and web hosting centers. Some
have said that the chip manufacturers may actually start competing
with the companies that are their prime customers at this
point in time. Other observers are starting to believe in
the future the computer chip manufacturers will become large
diversified conglomerates, the likes of a United Technologies.
It will be interesting over the next couple years to see were
these companies' expertise and capital takes them.
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