The Intel juggernaut has appeared to be slowing recently. For roughly two decades the company forged ahead, flattening opposition, amassing huge profits, and delighting stockholders. Its strategy: develop ever more powerful microprocessors, sell them initially at high markups, then drop prices gradually as new generations come online.
    Speed bumps in its profitable progress apparent by spring 1999 range from legal woes to new Pentium III chips that may be ahead of their time (and pose privacy threats). For virtually the first time in its history Intel faces real competition from other chipmakers and serious defections in the ranks of computer manufacturers.
    How will this affect the average, non-corporate computer user? Let's look at the facts. First, Intel appeared to lose momentum when the computer market changed drastically. Prices of entry-level computers plummeted rapidly. Since the late 1980s, PCs selling for over $2,000 dropped from a 40 percent market share to less than 10 percent in 1998. Under-$1,000 systems became common and ads now tout sub-$800 boxes routinely.
    Intel attempted to fill the low-end gap in its CPU (Central Processing Unit) lineup, but critics uniformly panned the first Celeron chips. Intel competitors AMD and Cyrix offered chips that equaled, even outperformed, Intel's economy models. A growing number of computer manufacturers, striving to meet the demand for lower-priced models and still make a profit, abandoned their Intel-only policies and began using AMD and Cyrix products as well.
    The result: Intel's market share in PC microprocessors dipped from 87 percent in fourth-quarter 1997 to 76 percent in the fourth quarter of 1998.
    Legal problems occurred when the FTC (Federal Trade Commission) filed an antitrust action against Intel. A tentative settlement had been reached, but details were sketchy as this article was being written. (Almost simultaneously, Motorola filed a suit charging that Intel stole trade secrets by hiring Motorola chip designers.) Industry analysts did report that the result would be a "kinder, gentler, less aggressive" Intel, which would be good news for competitors and other technology firms (including computer makers).
    Ultimately, grass-roots users at the bottom of the food chain will benefit from freer exchange of information, an end to "blacklisting" of firms that refuse to enter overly-restrictive licensing agreement and the greater competition that should result.
    The Pentium III (PIII) has raised problems, too. Many industry critics say it's a solution to a problem that barely exists right now. Some cautioned business buyers that PIII chips offered few plusses in desktop machines running most current software applications. "PIII Advances Aren't Enough," proclaimed PC Week in a cover story headline, adding: "The chip shows only marginal performance improvement over Pentium IIs -- no more than 8 percent -- when running most business applications."
    A PC enthusiast Web site, Ars Technica, tested a 500-MHz Pentium III against a 450-MHz Pentium II and found the increase to be a meager 11 percent. Of course, a few applications, especially those involving 3D graphics, do take advantage of certain PIII features. But if you're not a serious game player, don't look for much bang from the high-priced new Intel chips.
    Then there is the privacy issue, which could be the most critical of all for us end users.
    Computers based on the new Pentium III chips that run at 450 and 500 MHz began rolling out on February 26. These chips feature the Processor Serial Number (PSN), an embedded 96-bit ID that identifies the user's PC to any software that knows how to ask for it.