Packard Bell NEC has made a bid to improve its faltering progress in the PC market by announcing an alliance with National Semiconductor’s Cyrix subsidiary to offer Cyrix processors in its low-end PCs. Facing ferocious competition in the booming market for sub-$1000 PCs, it needs every advantage it can get over rivals and clearly Cyrix has offered cost and technology advantages it cannot ignore. Long-term, Packard Bell NEC says it is attracted by Cyrix’s ambitions to move to a PC on a chip, which it sees as defining a new category of products. The move will cause further twitches of anxiety at Intel Corp, which despite more frequent price reductions, sees rivals cashing in on processors for the mass market. IBM Corp this week announced it was selling Pentium II-compatible Cyrix designed microprocessors to PC makers offering inexpensive PCs. Ironically, financial terms of the alliance were vetted by Packard Bell NEC’s new CFO Marvin Burkett, former chief financial officer at Advanced Micro Devices Inc. With NEC Corp a major shareholder, Packard Bell is under strong pressure to produce financial results that will ensure the company has a successful IPO.
