Partners rather than rivals

The low-end PC market in China is now attracting an increasing number of PC manufacturers. Following this trend, Intel and AMD are vying to boost their sales of low-end processors while focusing on developing high-end CPUs.

On April 17, Intel demonstrated its Classmate PC, a small, mobile learning assistant and educational solution especially developed for students in emerging markets, at the Intel Developer Forum (IDF) 2007 in Beijing. Already available in five countries including Brazil, Mexico and India, Classmate PC will be promoted in another 25 countries including China.

Four weeks before the forum, Dell marketed its cheapest computer yet in Shanghai, priced at only 2,599 yuan. The EC280 desktop, installed with an Intel CPU and developed by its Shanghai-based China Design Center, targets PC beginners and those who buy their first computers in China.

At the end of last year, HP China introduced its HP dx2255 commercial desktops, which, installed with AMD AM2 Sempron 3200+CPU, 256MB of memory, a 80GB hard disk and a DVD-ROM drive, sold at only 2,999 yuan without a display.

The Godson 2E CPU, ICT’s latest development, is reported to be equivalent to the Intel PIII 1.0GHz popular several years ago, and with 256MB DDR of memory, an ATI RADEON 7000M internalized with 16MB DDR RAM and a 40GB hard disk, the configuration equal to that of dominating computers five years ago.

Godson computers have limitations also in their operating system. The computer, installed with a Linux operating system, can only handle text processing, Internet surfing and sending and receiving e-mails. Programs or software like Ourgame, QQ games, Skype and PPLive that are supported only by Windows cannot be played. Godson is now negotiating with these software developers and game operators, and it will take time before the results of these cooperative efforts are felt.

Simple as their operating systems seem, the operations Godson computers can handle are the most frequently used and more than enough for users who yearn for close contact with the outside world through a computer. Plus, their competitive price appeals to the majority of Chinese with average incomes.

Yet, since the market is still dominated by international brands, it remains to be seen how big the market for Godson PCs will be. Li stressed Godson would not compete with Intel and AMD for the larger PC market share, because he is quite aware of the gap between the CPU giants and Godson.

Cooperation is another way to survive. Zhang disclosed on April 15 that Jiangsu Lemote Technology is seeking a partnership with One Laptop Per Child (OLPC), a non-profit association dedicated to researching and developing a $100 laptop in the hope of revolutionizing the way we educate the world’s children. Launched by faculty members of the MIT Media Lab, OLPC was announced by lab co-founder Nicholas Negroponte, Chairman of OLPC, at the World Economic Forum in Davos, Switzerland in January 2005.

At the 2007 IDF, Intel CTO Justin Rattner also expressed interest in the Godson chip, saying there is room for cooperation between Classmate PC and the Godson computer. Rattner said Intel had contacted ICT to discuss the possibility of cooperation. If the two parties entered concrete negotiations, this would be good news for the institute and for the promotion of the chip.

Narrowing the gap

At the China Sciences and Humanities Forum on April 16, Li warned that China lags behind developed countries by at least two “generations” on many core, chip and computer technologies.

According to Li, it usually takes two years to develop a new generation of chips and he hoped that the chip technology gap between China and developed countries would narrow by 2010.

Whether Li’s wishes will come true or not is unforeseeable. Technology advances every day. Five years ago, PIII was the dominating configuration while today the dual core prevails.

Godson’s chief architect, Hu Weiwu, disclosed that ICT has launched the development of Godson 3, or the Godson 2F processor, which will have three products, with one core, four cores and 16 cores respectively. The 16-core product will be a high-performance processor targeted at 1GHz.

Hu said that the single-core Godson-3 processor will be mass-produced in the second half of this year and that ICT could possibly develop a high-performance 16-core processor earlier than rivals overseas.

It is estimated that there will be $20 million in revenue every year from 2007 to 2011 for the Godson chip and ICT will reap around $100 million, providing a strong pool for research.

Zhou Jun, research fellow with the China Center for Information Industry Development (CCID), believes the Godson chip should lay emphasis on application, adding that China’s chip will see great PC market potential because “the patriotic Chinese would choose computers with Godson CPU if the home brand could equal the performance of Intel or AMD.”