Motorola and

Microprocessor
ndustry in 1996
%e AM alliance versus ntel near
monopoly
A Apple
BM
M - Motorola
POWER PC ?
ontext
PowerP was te processor
arcitecture/processor family tat Motorola, BM
and Apple created in te early 90s to counter te
near-monopoly tat ntel x86 family (especially
wit its 486 and Pentium processors) enjoyed in
te microprocessor market and te ntel-
Microsoft "duopoly tat was seen as a very
serious competitive treat.
%ecnologically superior
%e PowerP arcitecture was
a clean slate arcitecture and
ence could offer superior
performance tan te
x86/Pentium family in early
1990s.
ntel Pentium ad te burden
of maintaining backward
compatibility/legacy support for
8086 from 1970s vintage,
limiting its performance.
allenges
ntel's Hig nstalled base
earI 90s, x86 processors from InteI (and the InteI-Iicensed second
source processors from AMD) had the majorit share (83%) of the PC
microprocessor market.
MiIIions of PCs were shipped with mostI InteI and some AMD
microprocessors.
Most hardware companies had design teams that performed new
desktop and Iaptop pIatform designs, with microprocessors from
InteI/AMD and peripheraI components from InteI/AMD/Texas Instruments
(TI) and other companies.
This wide avaiIabiIit of hardware coupIed with the software support
meant the instaIIed base was on ver firm foundation.
allenges
ntel x86/Pentium family software
legacy/backward compatibility
In 1990s, the Iarge communit of Operating Sstem Vendors such as
Microsoft, IM, DigitaI Research, various Unix fIavours and appIication
deveIopers were weII versed and heaviI invested in x86 software
deveIopment.
Tens of thousands, if not a miIIion or more, software
engineers/deveIopers were working on x86-based products.
PowerPC had aImost no instaIIed base! It was essentiaII a new
instruction set and new hardware into a fast growing market that was
dominated b InteI x86 architecture.
allenges
ntel's manufacturing capabilities
InteI has been a manufacturing compan from the das of its founding
and has been consistentI ver good at voIume manufacturing (miIIions
of units per ear).
InteI aIwas invested in ver serious R&D on semiconductor
manufacturing process technoIogies and has been on the cutting edge
of "fab" (chip fabrication pIants) technoIog ever since 1970s.
Owning and investing in its own muIti-biIIion doIIar fabs, aIong with
arguabI the worIds best process engineering/R&D has heIped InteI
maintain a huge Iead (and profitabiIit) over an of its competitors.
InteI commands superior profit margins as a direct resuIt of its
manufacturing technoIog.
allenges
ntel's continued enancements/new
features in eac successive generations
along wit moterboard manufacturing
Power management and other continuous advances at the pIatform IeveI
technoIogies (exampIes in the I/O area: US, PCIe; networking - wired
and wireIess standards;, storage: SATA, fIash memor, exponentiaI
growth in DRAM capacities/faII in prices)
allenges
Will te AM alliance survive ?
Can IM and MotoroIa wiII be abIe to focus on continuous product
execution Iike InteI is.
IM's main source of income had become the server market with their
power Iine of processors and MotoroIa was on its wa out of designing
processors.
SimpI put, desktop/Iaptop processors is InteI's bread and butter whiIe it
is a second-tier market for IM.
"uestions for discussion ?
Will tis alliance enables Motorola to
callenge ntel's No#1 Position in te cip
market ?
How could Motorola ensures tat it
captures te growing cip Market ?
And Wat is te outlook for te cip
market ?