Intel shifting Itanium 2 focus to higher-end

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[b]Intel shifting Itanium 2 focus to higher-end[/b]
[i]An effort by Intel to sell its Itanium 2 chip into high-volume, lower-end computer servers has not worked, the president of the world's largest chip maker said in an interview published on Thursday.[/i]

Itanium, which was jointly developed by Intel and Hewlett-Packard, has not yet found a large following in a server market crowded with competition from chips made by IBM, Sun Microsystems and Advanced Micro Devices.

"Itanium is showing success in the high end, not in the mid-range," Intel President Paul Otellini, who was chosen to take over as Intel chief executive next year, said in an interview with BusinessWeek. "It just doesn't work in terms of the economics of the low end of the industry."
Digital agenda

Otellini said Intel is repositioning Itanium 2 to be designed into higher-end servers and mainframes that do the heavy lifting for corporations and research institutions. Intel's less-expensive Xeon chip, a cousin of the Pentium 4 chip that is used in home computers, remains the company's mainstay for low-end servers.

"The mainframe isn't dead. That's where I'd like to push Itanium over time," Otellini said, adding that "we're focusing product development, marketing and software efforts on greater than four-way systems."

A four-way system is a server built with four microprocessors.

Intel spokesman Robert Manetta said Otellini's comments do not mean that the company is withdrawing Itanium from the lower-end server market. He said Itanium's success has picked up this year, with deployment of Itanium-based servers up as much as 60 percent this year.

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