Alliance Sets Out to Challenge Intel

It will develop a new generation of computers to run on advanced IBM/Motorola chips

A SEVEN-COMPANY alliance is hoping to take a bite out of Intel Corporation's dominance of the desktop computer industry.

Analysts differ on how successful the consortium, called the PowerOpen Association Inc., is likely to be.

Its members include two of the most powerful computer companies, IBM Corporation and Apple Computer, plus chipmaker Motorola.

Intel, however, is firmly established as the main supplier of the chips on which personal computers run. This has meant big profits for the chipmaker, while IBM has struggled with little success to differentiate its PCs from other Intel-based ones. Intel is about to ship Pentium, a new high-performance microprocessor.

The computermakers in the alliance, which was announced in Boston this week, will build machines based on chips developed in the past year by Motorola and IBM. The resulting products are intended to offer high processing power and an "open" environment on which a variety of software can run - hence the name PowerOpen.

Unlike past instances where computer firms have banded together to challenge Intel, the PowerOpen Association "really does have a critical mass behind it," says John Dunkle, president of WorkGroup Technologies Inc., a market research firm in Hampton, N.H.

"They're not saying this is the Intel-killer," Mr. Dunkle says, but the consortium members do see the new chips as a central part of their strategy. They see machines based on the chips as a "cost-effective alternative" to Intel-based machines, he says.

RIKKI KIRZNER, a market analyst with Dataquest, counters that the alliance represents "a new chip ... entering a market that's already saturated."

Motorola vice president Tom Beaver says the chips will offer performance comparable to Pentium at a significantly lower price.

Both IBM and Motorola will produce and sell the chips, which will come in three versions: low-end, standard, and high-end.

Apple intends to migrate its entire product line onto these chips to create "PowerPC" products. (Unlike IBM-clone PCs, Apple's machines already rely on Motorola rather than Intel chips.)

The microprocessors use RISC (reduced instruction set computing) technology, which is seen by many experts as superior to Intel's technology. But RISC-based systems, coming into their own after the industry has already standardized around Intel, have had limited appeal to date.

Ms. Kirzner says opening up a larger share of the market for non-Intel chips will depend on attracting software companies to write applications for the new machines, which will hit the market next year.

This week's launch is intended to build interest among software developers. The alliance hopes to minimize the need for software developers to adjust their programs to various computer platforms. Alliance members will each build their own machines, but these will share a common base of software code. On top of this can go a variety of operating-system software and applications.

Many computer users will value "being able to run multiple application sets from multiple" operating systems, Dunkle says.

Existing Apple Macintosh software and IBM's version of UNIX software can be easily transported to the new system, the alliance says.

A BIG question mark for the alliance, says analyst Tom Kucharvy of Summit Strategies in Boston, is how much of the software commonly used on Intel PCs will be made available on PowerOpen machines.

"One of their key goals - it absolutely has to be - is to get access to those applications," Mr. Kucharvy says. Presently neither Microsoft Corporation nor Lotus Development Corporation, the biggest PC-software firms, have pledged to support PowerOpen.

"I wouldn't be surprised if Lotus follows up" and supports the alliance, Kucharvy says.

The alliance, headquartered in Billerica, Mass., includes Bull, Thomson CSF, Harris, and Tadpole Technology, as well as IBM, Apple, and Motorola.

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