The future according to Intel.

Intel, traditionally the silent partner in the Wintel platform duopoly, suddenly seems eager to play a much higher-profile role in the future of the PC. That's a fascinating reversal of Intel's notorious paranoia (Intel chairman Andy Grove's own word) about technology disclosures. But more importantly, Intel's new enthusiasm for leadership creates -- potentially, at least -- a credible challenge to Microsoft's control of future computing standards.

To be sure, there are no signs that Intel and Microsoft are about to go to war with each other. In fact, it's difficult to imagine a world where the dominant microprocessor company and the dominant operating system company would stop collaborating at almost every level. Moreover, both companies want the same thing: A world where PCs evolve so fast that users feel compelled to buy new hardware and new software every year.

But Intel also has its own agenda in such key areas as multimedia, the Internet, and new markets. In a keynote talk to 1,500 developers at Intel's new media conference in late July, Andy Grove managed to talk for an hour about his vision of the "Connected PC" without once mentioning Microsoft or Windows. Grove wants to take PC penetration well beyond the current 30% of U.S. households, and he's convinced that the compelling applications will come from Hollywood, not Redmond. "We need an industry to make this thing [hybrid Internet-based multimedia] happen," he said, "because it is bigger than us, bigger than the industry that we have operated in for the last 20 years."

At the same time, Grove knows that Hollywood lacks the technological underpinnings to deliver products that will drive Intel machines into millions of new homes. So Intel still needs traditional PC developers -- and has unveiled a broad strategy to make sure those developers focus on markets that Intel thinks are important.

Here's what that strategy looks like to us:

* A better multimedia platform: Intel doesn't usually preview next-generation chip technologies (except to a few carefully chosen friends), for fear that rivals like AMD and Cyrix will get a jump on clone versions. But that secrecy also tends to delay the appearance of software that fully exploits the latest processor features. So Intel has decided to open the kimono on its upcoming MMX ("multimedia extensions") line of processors, which should appear in mass@market machines in time for Christmas of 1997. The MMX processor turns the PC into a high-performance entertainment machine: It incorporates 57 new instructions that Intel says "accelerate calculations common in audio, 2D and 3D graphics, video, speech synthesis and recognition, and data communications algorithms."

By eliminating most of the add-on processors and cards that currently support multimedia functions, Intel expects to push the cost of a state-of-the-art home PC to under $2,000 -- with appliance-like reliability as well. And if developers jump on the bandwagon and create great new MMX software, then Andy Grove probably gets the market expansion he wants.

But not everybody wins on this one. To the extent that the MMX provides high-performance multimedia support at the processor level, Intel undermines the importance of the operating system -- specifically Microsoft's own DirectX multimedia extensions to Windows. Game developers have always been lukewarm about Windows; if they get better performance by writing directly to the MMX chip, then Microsoft's hold on an influential constituency could be in trouble.

* A "hybrid" applications model: Grove's "Connected PC" relies heavily on content delivered across the Internet. But Grove is also convinced that we're not likely to see a near-term breakthrough in data transmission speeds or bandwidth much in excess of the current POTS ("plain old telephone service") standard. Thus, Grove suggests that the best model for content-rich multimedia is a "hybrid" product that blends slow Internet content with fast local disk-based content (using 8X CD-ROMs or DVD media). If this model is widely adopted, Grove predicts, we'll have "500,000 channels" of new media in the very near future.

Of course, lurking in the background is an alternative scenario that Intel doesn't much like: the Network Computer, essentially a dumb terminal that relies on a remote server for streaming video and audio content, remote execution of software (except perhaps local Java applets), and remote data storage. The NC is inherently a cheap commodity appliance -- like a telephone or a TV -- that may not even use an Intel chip. So it's not surprising that Grove favors hybrid applications that require machines with high-margin MMX processors, lots of memory, and high-speed disk drives. Intel gains very little if an expanded home market gets its entertainment content chiefly through NC devices running remote server-based software.

* High-profile developer support: Intel is taking no chances about winning the hearts and minds of third-party developers. The company has already invested $70 million in software and Internet startups (which puts it in the top ten or so of Silicon Valley venture capital firms). A new Internet Media Developers Support Program dramatically expands Intel's direct-to-developers services, especially in such key areas as hardware discounts, development tools, and technical support. Intel has even built a lavishly-equipped multimedia studio in Portland where developers can get a feel for the production values that MMX technology will deliver. Developer programs often end up squandering resources on non-strategic products (Apple's classic blunder), but Intel seems to have a clear idea of the kinds of products it wants to encourage. And since Intel doesn't compete with the developers it supports, we suspect there will be more trust and information sharing than occurs in the Microsoft and Apple developer programs.

* A new Intel branding campaign: Intel's marketing plans for MMX-enabled software are still fuzzy, but we expect to see a major logo program to identify titles that take advantage of the MMX extensions. Despite the Win95 logo fiasco (which Microsoft itself subverted to accommodate its unrevised Windows 3.1 titles), the experience of the "Intel Inside" campaign suggests that PC buyers do believe the Intel brand name implies superior technology. Moreover, Intel seems to be getting more aggressive about its branding: The company recently warned PC manufacturers that if the Intel logo doesn't get exclusive exposure, they can forget co-op funding. If Intel plays the same kind of hardball with a software logo program, MMX compatibility could become one of the most powerful branding symbols in the retail channel.