INTC Intel Corporation

By Don Clark 

Intel Corp. is overhauling its flagship line of computer chips, in a high-stakes bid to revive personal-computer sales.

The Silicon Valley giant says the sixth generation of its Core processor family, based on a design dubbed Skylake, will boost performance and reduce power consumption of PCs ranging from ultrathin notebooks to high-end gaming rigs. Other Skylake features could reduce the number of wires computer users need and replace passwords with facial-recognition technology.

Intel's long-awaited chips, announced Tuesday night, follow the launch of Microsoft Corp.'s new Windows 10 operating system in late July. The two companies hope the availability of new hardware and software will drive demand for PCs in a shrinking market.

"How Skylake does will determine the glide path of the PC industry," said Patrick Moorhead, an analyst at Moor Insights & Strategy.

PC sales began slowing several years ago as consumers shifted spending to tablets and smartphones. Sales rebounded briefly in 2014, reflecting purchases by businesses as Microsoft phased out support for its aging Windows XP software.

But conditions softened again in 2015. Unit shipments fell nearly 12% in the second quarter, compared with a year earlier, International Data Corp. estimates. Some analysts link the latest decline partly to customers waiting for Windows 10 and Skylake.

Intel plans to use the Skylake design in 48 chips arriving in coming months. Makers of high-end gaming PCs have begun offering Skylake-based systems. Laptop makers are expected to first show off their upgraded products at the IFA trade show in Berlin, which opens Friday.

"It's an architecture that we are going to be seeing across the entire PC ecosystem," said Charles King, an analyst at the research firm Pund-IT.

Kirk Skaugen, the senior vice president who heads Intel's client-computing group, says Intel is eyeing more than 500 million PCs in use that are at least four years old. Compared with those systems, Intel says, machines powered by Skylake chips will be more than twice as fast on standard computing tasks and offer triple the battery life. The computers also will be smaller and lighter, because Skylake chips use less power, meaning components can be placed closer together and will require less cooling. Compared with the most recent systems, Intel says mainstream laptops with Skylake chips are 10% faster on standard productivity applications at 20% lower power consumption.

"Our research says people still want to refresh their notebooks," Mr. Skaugen said. "They are just waiting for the right time."

Besides computers with familiar designs, Mr. Skaugen predicts Skylake will help popularize newer ones--including ultrathin notebook PCs that require no cooling fans and "compute sticks," cartridge-style devices that plug into TVs to provide them computing power.

Intel is encouraging PC makers to combine the new chips with three-dimensional camera technology it developed known as RealSense, designed to calculate the size of objects and distances between them. Such cameras can help recognize faces for authentication purposes or scan objects for 3-D printing, Intel says.

The Skylake rollout also dovetails with Intel's desire to reduce the tangle of wires on users' desktops. One key development is a new version of the widely used Universal Serial Bus, or USB, connection scheme that Intel is combining with technology it calls Thunderbolt. The result allows one wire to deliver high-speed data, drive external displays and charge laptops without a bulky power supply, Mr. Moorhead said.

Write to Don Clark at don.clark@wsj.com

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(END) Dow Jones Newswires

September 01, 2015 21:14 ET (01:14 GMT)

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