ALKHOBAR, 6 September 2005 — Intel has been in the news in the Middle East quite a bit lately, mostly for the wrong reasons. There have been legal problems for the company in Japan, the EU and the US. Then came the stories of its possible $4-billion investment in Israel and now some vendors that have been exclusive Intel customers are featuring AMD’s processors in their products. Despite all the difficulties, Intel’s stock has been on a gradual upward climb in 2005, after a year long slide was halted toward the latter part of 2004.
At the Intel Developer Forum (IDF) held in August, Intel’s CEO and President Paul S. Otellini said the industry is on a new “performance per watt” course that will deliver powerful Intel-based computers that are increasingly smaller, sleeker and more energy-efficient. To illustrate his comments, Otellini unveiled the company’s next-generation, power-optimized micro-architecture for future digital home, enterprise, mobile and emerging market platforms — and low-power products that will enable a new category of converged consumer devices.
Intel will introduce the micro-architecture in the second half of 2006, which combines the strength of the company’s current Intel NetBurst and Pentium M micro-architectures and adds new features. Intel claims that the multicore foundation will help enable unique computer designs that will power sophisticated and user-friendly digital home and office PCs. The new micro-architecture is also supposed to help IT managers increase responsiveness and productivity while at the same time reducing real-estate and electricity burdens company’s face as server data centers grow.
Otellini showed the first public demonstration of Merom, Conroe and Woodcrest — processors for notebook, desktop and server platforms designed on Intel’s advanced 65-nanometer technology manufacturing process. He also said Intel has more than 10 processor projects that contain four (quad-core) or more processor cores per chip.
Otellini also announced that forthcoming lower-power products will lead to a new category of ultra energy-efficient “Handtop PC” devices that provide a converged communication and PC-like experience but require less than a watt of processing power and weigh under a pound. Significant decreases in a computer’s wattage consumption could save billions of dollars in electricity as hundreds of millions of new PCs and servers are sold in the coming years. Intel and analysts predict that as many as 200 million computers may be sold this year alone.
WiMAX was a technology of note in Otellini’s presentation, with the CEO emphasizing that WiMAX plays a key role in both delivering high-speed broadband and premium entertainment to digital homes, as well as Internet access to rural areas. WiMAX, an acronym that stands for Wireless Interoperability for Microwave Access, is a standards-based wireless technology that provides high-throughput broadband connections over long distances. The WiMAX protocol is a way of networking computing devices together; for example to provide Internet access, in a similar way to Wi-Fi, but WiMAX is both faster and has a longer range than Wi-Fi.
In a conversation on Wednesday with Sam Al-Schamma, Intel’s GM for the GCC, Al-Schamma emphasized the importance of WiMAX to bridging the digital divide in the Kingdom.
“When I start looking at the market here, in general I think, people in the Gulf are typically technology friendly and those who go and buy technology buy rather high end. However, if you look at PC penetration and Internet penetration in the Gulf and Saudi Arabia specifically, it’s in the low teens, according to IDC. So you wonder why is that?” Al-Schamma asked. “The truth is that people probably see the value of a TV much more than the value of a PC. The reason for that is two fold. One is content and two is access and you have to have easy access. Going through a dial-up of 50K or less is not acceptable these days. Given the content that is on the Internet today, you need faster, better connections.”
Al-Schamma asserted that all GCC nations and all telco’s throughout the region are seriously looking at broadband, despite the physical limitations associated with it.
“That is exactly why some of them are looking at WiMax,” he explained. “If you look at cities like Riyadh or Jeddah, these are spread out cities of not very high density. In these cities you can’t pull fiber into many buildings of 80 stories and get thousands of people connected. In these cities there are lots of villas and low rises and it is very expensive for a telco to pull wires and put the infrastructure. WiMax can be set up for a fraction of the cost. We have been intensely working with the Saudi government on the concept of digital communities and smart cities and we have been showing them what we have done with other countries and showing them where it has worked and where it hasn’t worked. It is simply a question of timing. If you fast forward another 6 to nine months, probably the picture will be very different.”
It’s nice that Intel sounds so optimistic because lately the local community hasn’t been very happy with the role Intel has been playing in the region. No Muslim nation was included in Intel’s Digital Community Initiative announced last month, and Israel was. This is despite the fact that Muslims have overcome their distaste in dealing with a company that has a strong Israeli presence and have bought an increasing number processors from Intel. Al-Schamma stated that the entire digital community issue was once again simply a “question of timing.”
“In other areas they already have the networks in place and now it is a matter of getting the applications on top of those,” he advised. “We started the discussions on the networks with the local governments last year. Digital Communities were not selected based on the fact of religion or language. Selection has to do with how far the discussions are going along with the local authorities. We have the interest and the commitment. I wish I could be in a position now where I could announce something, but we are a little bit behind in terms of the time line. We have the commitment now to enable digital communities in our region. Basically we just have to pick the one or two to move forward with that.”
Al-Schamma was happy to respond to the query of why Intel’s Regional Director for Turkey, Middle East and Africa, Aysegul Ildeniz, is based in Turkey and not Dubai, as Intel’s recent regional directors were. Did Intel think for some reason that Turkey was the center of the Middle East?
“With the expansion that we’ve been having in the Middle East we used to run everything out of Dubai. What we have done now is the resources we have been adding have been added in the countries where the action is. So we have significantly ramped up our office in Riyadh to about the same size as we have here in Dubai. We usually don’t talk about numbers. A little bit over a year ago in Saudi Arabia there were less than a handful of people in our office there and now we have a full-fledged office. We have also had growth in our office in Egypt, we added a few people in Turkey and South Africa,” said Al-Schamma.
“Instead of having everything concentrated in one office we distributed the offices and replicated a lot of the functions that were done centrally before. I am responsible for the Gulf, spending half my time in Saudi Arabia and half my time in Dubai and my resources are split, half in Saudi Arabia and half here. The regional director is sitting in Turkey, but if someone else comes in tomorrow, they could be sitting somewhere else.”
As for the increasing visibility of AMD in the market, Al-Schamma stated that he believes competition is always good.
“Ultimately, the best way to move forward is to let people get the options, evaluate what they have in front of them and then make their decisions. The value we believe Intel brings to the table is not just the processor and the price of the processor but everything else you need today to build a solution,” he said. “If you look at all the software support that we provide to developers, all the tools we give them — compiler and libraries and threading tools that make their applications run better and faster on an Intel platform, I think that makes us unique. A lot of times people don’t realize that they have these options with Intel. The first thing they look at is one processor compared to another processor. But if you compare everything else you need to build a solution then the picture is completely different.”
Al-Schamma refused to discuss Intel’s new facility in Israel and referred to the company’s statements in regards to the legal actions on fair trade issues. However, he did defend Intel’s actions in going after business in the region.
“Here, it is business as usual,” he remarked. “We believe we do the right thing. We compete fairly and definitely here we’ve all gone through rigorous training on what to do and what not to do and how to make sure you are working properly with your customers and avoiding any situation that could be misconstrued.”
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