Intel Partners See Plentiful Opportunities With Sandy Bridge

Sandy Bridge, the first Intel platform to combine a graphics processor and CPU on a single piece of silicon, on display at CES this week, could have far-reaching impact on the graphics processing industry.

Intel's second-generation Core processor line represents a major upgrade in performance for an integrated graphics solution, according to several system builders in the reseller channel. In addition, based on its pricing and power-efficiency, Sandy Bridge appeals to OEMs seeking to offer smaller form-factor machines to consumers, and could threaten part of the discrete graphics market, Intel's partners say.

"It means they've got their eye on the ball," said Steve Brown, vice president of sales and business development at Blue Hawk Networks, a Campbell, Calif.-based system builder." It’s the first step in re-inventing the traditional Atom processor. It's been two-and-a half-plus years."

Manufacturers were quick to hop on board Sandy Bridge. MSI and Asus Wednesday launched products featuring Intel's Core i7 2600K and Core i5 2500K processors, which include integrated video compression and access to system clock settings. At CES, Hewlett-Packard and Lenovo said they will incorporate the much-anticipated low-cost processors in their products.

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Now it's up to partners and distributors to develop and deliver Sandy Bridge-based solutions. Kent Tibbils, vice president of marketing at ASI, a Fremont, Calif.-based system builder said Intel's Sandy Bridge was likely to be relatively profitable for Intel and its partners, relatively soon.

"Traditionally the channel does really well during the launch of new technologies," said Tibbils. "Resellers adapt the technology quicker, and implement it into systems faster, while offering more one-to-one basis with the customers for communicating value of technology. Intel's a big supporter of the channel and the channel supports Intel very well by getting these products to market faster than would otherwise happen."

Not only do Intel's partners believe there is a demand for this kind of solution, they expect their customers to expect a significant leap in processing capability in order to justify an upgrade at this time.

"Customers are going to have an expectation of big gains in performance and power-efficiency when a product comes out," Tibbils said. "People really want to see that thirty or forty percent gain in performance. So I'm not surprised by Intel's major performance gains with Sandy Bridge."

Next: Sandy Bridge And Intel's Partner Strategy

Whether system builders can create value off of Sandy Bridge-based solutions partly depends on whether Intel follows through on its stated intentions.

During the launch, Intel said that the channel will play a major role in Sandy Bridge's distribution strategy, following Intel CEO Paul Otellini's similar comments about Sandy Bridge at COMDEXVirtual in November.

Tim Ulmen, principal at Midwest IT solutions group, a Wichita, Kan.-based system builder, said he attended Otellini’s keynote presentation at COMDEXvirtual and was reminded of the leaps and bounds of the Intel processors in the 90’s.

"I agree whole-heartedly with him that the fusion of the CPU and GPU represents a grand step in technology, as did the step from the x86 to the Pentium processor," Ulmen said. "For the most part the implications for the custom system builder are very positive. While small mobile devices will benefit the most from this leap in technology, the benefits to the custom PC are still plentiful. "

Ulmen said that Sandy Bridge offers several important benefits.

Those include higher graphics quality without the need for a discrete graphics card, which leads to less power consumption and overall size reduction of the PC chassis, which Ulmen said will prove beneficial in markets such as digital signage and digital health.

In addition, Sandy Bridge will require less power consumption, which will lead end-users to save on energy costs, he said.

"I definitely feel the custom system builder will benefit from Sandy Bridge, for the timing is right for a massive PC refresh and this technology is one of the more compelling reasons for an end-user to replace that old Pentium PC," Ulmen said. "With the initiative to go Green and the emphasis on cost, a PC-based on Sandy Bridge technology should be an easy sell."

One particularly high-profile manufacturer in the consumer market could probably use Sandy Bridge's improved performance, as well as video capability.

"People are excited about Sandy Bridge, especially as it relates to Apple's mobile offerings," said Nick Gold, director of business development at Chesapeake Systems, a Baltimore-Md. based system builder that traditionally integrates around the Apple Mac platform. "Performance is very important at this point, given the fact that Apple had to make do with the Core Ii duo. People feel those machines have been falling behind in the performance department. That will be the driving factor in the adoption of Sandy Bridge."

Next: Rumors Of Sandy Bridge-Powered Macs

Reports emerged last month stating that Apple expects to offer smaller Macbooks and the new Macbook Air line with Sandy Bridge. Gold said Apple's Mac Mini could be getting to the point where it may need an update, however, he added, it could be months before they offer such a product with the Sandy Bridge platform.

Gold said Intel's new processor family seems like one of the biggest jumps in its design in many years, rather than just another incremental improvement.

"Apple continues to use Intel's Core 2 duo processors in 13-inch, Macbook airs, and in other small form factors," Gold said. "Intel's licensing dispute with Nvidia has prevented Apple from using discrete graphics on those motherboard chipsets."

Now that Intel has settled its legal dispute with Nvidia and Sandy Bridge has launched, Apple could offer Sandy Bridge-based products for its Macbook line in the coming year. However, Gold pointed out that Apple is likely to follow its own product timetable rather than schedule their product releases around Intel's as other manufacturers have.

"With Sandy Bridge, Apple might be able to release new small factor machines that will have much more modern CPUs than the Core II duo," Gold said, "A lot of people are speculating about that."

Apple enthusiasts have already figured out how to run Sandy Bridge on Mac OS X Snow Leopard, and posted instructions on the tonymacx86 blog.

If Apple does upgrade some of its Mac systems with Sandy Bridge, they and other OEMs could get a pretty good deal from Intel. The Core i5 2500K lists at $107, and the Core i7 2600K lists for $184. Intel's starting prices for the updated Core i3, i6, and I7 chips offer seemingly good value in terms of performance, possibly impacting other segments of the market as well as their manufacturer and reseller partners' margins.

James Huang, product marketing manager at Amax Information Technology, a Fremont, Calif.-based custom system builder said system builders including AMAX, which has already brought a Sandy Bridge-based solution to market, will help introduce Sandy Bridge to a wider market audience.

Next: The Potential For Sandy Bridge-Based Solutions

Huang says Sandy Bridge solutions could appear in a number of other verticals besides the multinational enterprises -- areas of business opportunity where system builders offer varying solutions. "The demand for Sandy Bridge will mostly be in the SMB, education, government, and home markets," Huang said.

"Sandy Bridge-based solutions may include GPU solutions, higher-performance appliances for various industrial applications, and also cost-effective server solutions for the SMB market," Huang said.

"The starting prices for Sandy Bridge are very competitive," Huang said. "The performance is very good compared to previous generations of Intel single processor-based solutions."

Other system builders also thought Sandy Bridge offered good pricing, but suggested that may favor larger vendors, rather than channel resellers.

Brown said Intel is currently offering Sandy Bridge at a very aggressive price, and that manufacturers are likely to ask Intel to bring the price down, which Intel could be willing to do through rated volume discount.

"Pricing is subject to interpretation, you can ask ten people and get six different responses," Brown said. "They may have low margins on the client side, but they could be doing VM implementation on the enterprise side. Otherwise these aren't really money-makers for solution providers," Brown said. "Solution providers are going to go back to Intel with a price asking them to include certain built-in capabilities. It's going to be tough for Intel to pull off a margin on it. But if most of the money is being made on the enterprise side as it interacts with the client, that makes sense to me and I would pursue it.

"I think there's a market for it," Brown added. "The question is who's the market? Is it the end-user? And who are those guys in the channel who are going to bring solutions to the end user? I don't think there's going to be a ton of businesses that are going to build enough integrated solutions that include the newest generation of Intel products. Typically, system providers wait on something like this. I think it's going to be large enterprises, global companies like Chevron and other upper-level enterprises who would be the consumers, the ones channel partners are building them for."

Brown expects the solution to be impact a specific segment of the overall PC market.

"They're probably going to be taking advantage of that thin-client, low-end market," Brown said. "I think that's the advantage of this chip. So they're countering the thin client by going down to its price level."

Next: How Will Discrete Graphics Be Impacted?

In addition to client devices with a lightweight form factor, Brown said Intel's integrated graphics solution could pose a threat to lower-end dedicated GPUs in the market, as it may outperform those processors in addition to offering CPU capability.

"It puts a lot of pressure on dedicated graphics, there's no doubt," Brown said. "You'll probably see the Intel products take advantage of the low-end, but I don't see a cost-effective solution being able to compete with high-end products."

Other system builders agreed that the challenge to the GPU market should not be overstated, and that this week's release will not affect the high-end segment of the GPU market.

"I think Sandy Bridge is definitely going to have an impact on discrete graphics cards in a low to mid-range, certainly at the high end I don't think discrete graphics will compete," Tibbils said. "But for people who want to do more video at home, semi-professional stuff, video editing, video capability is important, and in Sandy Bridge, it's pretty strong. So there will be some impact on the midrange market for discrete graphics."

Even if Sandy Bridge does represent a variety of opportunities, those probably do not encroach on the territory of graphics-intensive applications.

"The entry-level discrete graphics segment will be impacted by the launch of Sandy Bridge, since Sandy Bridge’s graphics performance is better than many of the existing entry-level discrete graphics cards in the market. But for higher performance graphics rendering solutions, an additional discrete graphics card is still needed."

Gold says Apple is likely to use discrete graphics cards for the foreseeable future, even though Intel has upgraded the relatively underwhelming integrated graphics technology it offered before.

"Open CL code is always going to run way better than discrete graphics. With that said, Sandy Bridge is supporting Open CL," Gold said. "Apple could move toward integrated graphics for their small form factors in the next product cycle or two, but I would be shocked if they moved away from discrete cards on professional desktop machines."

Although Sandy Bridge includes Open CL support, it does not offer Direct X 11, the most recent version of Windows' software platform for graphics technology. That will probably be different the next time around.

Next: Ivy Bridge Next Up

In an interview on Thursday with the IDG News Service, Mooly Eden, vice president and general manager of Intel's PC Client Group, said Intel will integrate DirectX 11 graphics technology for its next laptop and desktop processor platform, codenamed Ivy Bridge.

Intel expects to start shipping Ivy Bridge chips with DirectX 11 support to PC makers late this year, as the company does every year, as part of its "tick-tock" product roadmap. Ivy Bridge will succeed the new Sandy Bridge-based Core i3, i5 and i7 processors, which do not include DirectX 11 support because, according to Eden, few applications have adopted DirectX 11 to this point.

As manufacturers and reseller partners figure out the extent of the "leap" that Sandy Bridge offers and begin implementing solutions and launching products based on Intel's architecture, it may already be time to look ahead to the next incremental step.