Intel, HP Launch New Processor

P A L O A L T O, Calif., May 30 -- After nearly a decade of development and two years of delays, Intel Corp. and Hewlett-Packard Co. launched the first in a new generation of microprocessors they hope will dominate the next era of computing.

The Itanium processor, developed by both companies, is designed for workstations and servers — machines that power Web sites, sift through data and run scientific applications.

As prices in its core PC business slide, Intel hopes Itanium will capture a slice of the high-end server and workstation market dominated by Sun Microsystems Inc. and International Business Machines Corp.“This launch is not just important to us, it’s critical,” said Paul Otellini, executive vice president and general manager of Intel’s Architecture Group on Tuesday.

Powerful But Pricey Processors

In a launch subdued in comparison to desktop processor introductions, Intel and Hewlett-Packard officials unveiled HP’s first broadly available Itanium machines Tuesday. Prices start at $7,000.

Dell, Compaq, IBM, Silicon Graphics Inc. also announced their first Itanium-based systems. All are expected to be available in June. In all, 25 computer makers are expected to offer more than 35 models this year.

The chips, which range in price from $1,177 to $4,227, are available at speeds of 733 megahertz and 800 MHz.

Better Chips in the Pipeline

Some analysts, however, do not expect strong demand for machines based on the processor until Intel introduces the chip’s second generation, code-named McKinley, later this year.

“I didn’t think Itanium was going to be spectacular at launch because of the fact that essentially it’s a beta product for McKinley,” said Eric Ross, an analyst at Thomas Weisel Partners.

Intel spokesman Bill Kircos said faster and cheaper chips are always in the pipeline, and that it would not make sense to hold back a launch because something better will be available in the future.