The crowded personal computer market got a little more crowded Wednesday when semiconductor maker Cyrix Corp. announced plans to enter the high-performance PC business.
Cyrix, based in Richardson, Texas, said it signed an agreement with Plano, Texas-based computer services company Electronic Data Systems Corp. to manufacture and distribute high-end computers to big business clients.
Stephen Lapinski, general manager for Cyrix's systems group, said the company hopes to use the PCs to raise its brand image, which has been overshadowed by semiconductor giant Intel Corp.
Despite some independent studies showing that Cyrix's 6x86 chip runs faster than Intel's Pentium, Cyrix has been unable to loosen Intel's grip on the market.
Lapinski said Cyrix is concerned that Intel's expansion into computer motherboards, a computer's main circuit board, may ultimately freeze Cyrix out of the chip market by designing systems that do not meet Cyrix's specifications.
"If you look at the footprints in the snow, you can absolutely suggest they are going to lock us out one way or another, and we're not going to let that happen," he said.
However, industry analysts say the strategy is risky, particularly in light of the recent price wars raging in the PC market.
"They make a very inferior product to Intel," said Rick Whittington, an analyst at Soundview Financial.
Cyrix shares fell 93.75 cents to $21.3125 on Nasdaq.
Lapinski stressed that the company's investment in the venture will be modest, with most of the computer parts coming from select vendors.
Unlike other PC makers, he said, Cyrix has no plans to sell its PCs to home users.
"The target customer for us is the high-end, heat-seeker individual. It is not the commodity individual," Lapinski said. "Therefore, we're very focused on the Fortune 1,000 clientele in organizations who need the fastest and the latest for transaction processing."
Cyrix expects to ship as many as 100,000 units in the first year, a far cry from industry leaders such as International Business Machines Corp., Apple Computer Inc. and Packard Bell Electronics Inc., which churn out millions of PCs a year.