IBM eyes new market

April 13, 2001: 12:15 a.m. ET

Tech titan introduces new chips designed for 'information appliances'
By Staff Writer Richard Richtmyer

NEW YORK (CNNfn) - IBM on Friday is introducing a new computer chip aimed at the burgeoning market for "information appliances," a term used to describe any device other than a PC that is capable of accessing the Internet.

The new chip, called the PowerPC IAP, represents Big Blue's first foray into the IA market, which is expected to blossom over the next several years. Technology research firm International Data Corp. recently forecast that shipments of consumer IAs will outnumber consumer PC shipments by 2002.

"A lot of people have come out with products aimed at this space, and we're all seeing that this is a large and growing market," said Scottie Ginn, vice president for the pervasive business line of IBM's Microelectronics unit.

The PowerPC IAP combines a microprocessor with a number of other computing features on a single piece of silicon, a so-called "system-on-a-chip." The company is aiming it at consumer electronics' manufacturers who want to add Internet capabilities to their products while minimizing the number of components in order to make them smaller, less costly and more power efficient.

"Our strategy is to get all the building blocks that you need to build products in this space ... and customize them specifically for each customer and very quickly spin a system-on-a-chip implementation," Ginn said. "This is the first one with that capability that is aimed at the IA market," Ginn added.

With the introduction of PowerPC IAP, the Armonk, N.Y.-based tech titan is throwing its weight behind the idea that the PC will be eclipsed by alternative Internet access devices in the computing environment of the future, a concept that has been the subject of some debate in the industry recently.

And the company is adding its name to what is a relatively short list of component makers that offer products specifically designed for IAs.

One of the most vocal has been National Semiconductor, which has been heralding the coming of an IA revolution for about five years. The company introduced its IA chip, called the Geode, last September. So far, National Semi says it has more than 140 customers working on Geode-based IAs, and there are about 25 such devices currently on the market.

National Semi's Geode chips currently are powering IAs from companies including Compaq, Honeywell and Samsung, among others.

"To have a company of IBM's stature saying, `We want to compete in that market, too,' is absolutely a validation of the concept that we've been talking about for a number of years," said National Semi spokesman Jeff Weir.

Transmeta also has been pointed out as a rising contender in the IA market. The Silicon Valley startup's "Crusoe" chips currently are powering IA devices made by Gateway, Hitachi, Frontpath and others.

Although the company's primary focus is on the market for lightweight portable PCs, some analysts expect Transmeta to make more headway into the IA market as it develops and the company refines its technology.

Shares of IBM (IBM: Research, Estimates) fell $1.23 to $96.20 Thursday. National Semi (NSM: Research, Estimates) finished up $1.50 to $26.75. Tramsmeta (TMTA: Research, Estimates) gained 40 cents to $19.15.