IBM Discovers the Power of One: "For a proud tech-industry leader, the situation couldn't have gotten much worse than what IBM faced in the summer of 2003. Its semiconductor unit, which had bet on a strategy of manufacturing all kinds of chips for all comers, had lost $1.2 billion over the previous 18 months. Big Blue was also spending billions to upgrade its chip plants -- and getting thrashed by Asian rivals that were manufacturing at much higher volumes and offering bargain-basement prices. It was a full-blown crisis.
With the introduction of the Power5 chip last year, an IBM server ran a standard data-processing job nearly three times faster than the previous record, says the nonprofit Transaction Processing Performance Council. Typically, server companies leapfrog each other when they come out with new models, but analysts say IBM may be able to sustain its lead.
IBM is doing even whizzier things with supercomputers. In a radical shift, its new Blue Gene model uses tens of thousands of inexpensive embedded Power processors -- the type used in cell phones. The company also produced chip innovations for cooling and speeding communications within the computer. The result: a machine that broke the supercomputing speed record late last year and still holds it. The first Blue Gene cost $100 million, one-third the price of the supercomputer it beat out.
Servers and supercomputers are familiar turf for IBM, but if it can hit a home run with Cell, it could vault into the lead in a promising new market. While the chip was originally conceived for PlayStation 3, due out in 2006, Cell is now aimed at a swarm of consumer devices -- from high-definition TVs to mobile gaming gadgets. The Power technology is well suited to these applications because it's cool-running and, in the Cell design, capable of handling a deluge of demands -- rich graphics, video processing, and real-time communications. If all of these efforts deliver as IBM hopes, the Power processor will finally live up to its name. "