Sandy Bridge Success Not Translating Yet For Some System Builders

Sandy Bridge, the code name for Intel's first platform to combine a graphics processor and a CPU onto a single piece of silicon, launched in January and represented a major upgrade in performance for an integrated graphics solution, according to several system builders in the reseller channel.

Intel bet on the success of Sandy Bridge in a major way. During the product's launch at CES 2011, CEO Paul Otellini told the crowd that the new technology would represent a third of the chipmaker's overall revenue in 2011 and generate a total of $125 billion in PC revenue.

Judging from Intel's recent accounts, Sandy Bridge is well on its way to achieving this goal. CFO Stacy Smith told investors and analysts on Intel's second quarter earnings call in July that the technology broke internal records. On the same call, Otellini added that the Sandy Bridge technology represented "over half" of Intel's Core sales. Core is the brand name for Intel's flagship family of processors.

However, some systems builders say that customers now wait longer than ever to update PC hardware and Sandy Bridge compels only the most technologically advanced customers to buy new machines.

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"I replace my own computer every two years, and I did it in 18 months this year because of Sandy Bridge, but our customers are not doing that," said Joshua Liberman, president of Net Sciences, an Albuquerque, N.M.-based system builder. "Honestly, nobody has accelerated [PC buying decisions] and it's because nothing trumps economic woes."

Darrel Bowman, CEO of Tacoma, Wash.-based, agrees and says his clients are waiting to see what the economy will do next before deciding to buy new PCs.

"Sandy Bridge is not a big driver for our clients at all. That is specifically in today's market. I don't know if it will stay that way, but that is how it is right now," he said.

Bowman also thinks there is a gap between customer's needs and the capacity of the Sandy Bridge products. "Historically, we underuse our capacity for performance on the individual basis, so unless people are in a specialty space -- like users of AutoCAD, video or gaming -- they are ultimately concerned with reliability and stability, not processing power or integration or the support for 16 different functions," he said.

Intel disagrees. The company's marketing efforts for the Sandy Bridge technology focus on a concept it calls the media engine. The media engine message promises quick video file transfer times, wireless projection capability and the ability to view HD content on a wireless display, according to Adam King, director of notebook product marketing at Intel.

In contrast to Bowman's comments, King thinks these are technologies most users need.

"You tend to think of content creators as professional videographers or musicians, but every time you post a video to You Tube, you become a content creator," King said.Intel struggled with Sandy Bridge initially due to a defect in the chipset used with most Sandy Bridge processors. The Intel 6 Series chipset, code-named Cougar Point, shipped with a defect that in some cases caused the SATA ports in the chip to degrade over time. That would impact the performance of attached SATA hard disks and DVD drives in PCs using the Sandy Bridge processors, Intel said during a conference call about the problem in January.

As a result, several OEMs partnering with Intel suspended production of systems running Intel's Sandy Bridge platform and offered to compensate customers affected by the Cougar Point design flaw.

Intel discovered the flaw and shipped updated chipsets about one month later, but even the short delay undercut progress some systems builders had established around the Sandy Bridge products.

"For the first time in several years we were starting to witness a small uptick in sales primarily based on this new platform," Glen E. Coffield, chief executive technologist at Lake Mary, Fla.-based Smart Guys Computers, told CRN at the time of the recall. "This now put a knife in the heart of this uptick."

For other systems builders, the defect caused fewer problems. Liberman said his company planned extra time for internal testing of the Sandy Bridge products, and as a result sales were not drastically affected. In his view, Sandy Bridge is a great product at a competitive price point, but many customers still refuse to update old systems.

"We have a median age of five years for our customers PCs. In the twenty years I've been in this business, we have never had that long of a refresh cycle," Liberman said.

Bowman points out that advances in technology also impact the refresh cycle. "Two years ago we should have been in the refresh cycle on historic principle. But our market is a little more sophisticated now and people's machines are still working, so people don't see a competitive advantage of upgrading," Bowman said. "If they can't put it down in dollars and cents and productivity gains, they're going,' No, I'm not going to bet on that yet'."

According to Liberman, even customers with the opportunity to achieve productivity or economic gains with a product like Sandy Bridge are hesitant.

"The bang for the buck is amazing. We can offer a sub-$1,000 machine with a fast SSD and a quad core chip and 8G of memory. That's phenomenal," he said. "But, again, nothing trumps economic woes, not even ROI."

The next generation of the Sandy Bridge products, code-named Ivy Bridge, represent a 'tick' in Intel's "tick-tock" product roadmap. The naming convention describes the chip giant's product release cycle, where a 'tock' represents major architectural upgrades, like Sandy Bridge, made to the company's most prominent client and server processors and the hardware platforms that support them.

A 'tick' refers to various improvements to Intel's silicon fabrication process, including the roughly bi-annual doubling of transistor counts on integrated circuits. Ivy Bridge follows the 'tick' pattern, but includes additional architectural changes to the graphics components, according to King.

"Ivy Bridge is a tick generation, in the sense it is fundamentally the same architecture as Sandy Bridge shrunk onto a new manufacturing process," King said." But the graphics are much more than a tick. We're actually adding a lot more architectural changes, so we expect much more than incremental graphics improvement with Ivy Bridge."