Sun and Intel to Announce Partnership

It's rumored that server and software maker Sun Microsystems Inc. is in the process of finalizing a partnership with popular computer chip manufacturer Intel Corp. The conditions of the deal will have Sun using chips produced solely by Intel, while Intel will agree to endorse Sun's Solaris operating systems.

The individual that released the details of the partnership to the media has requested anonymity because of the refusal for comment by both Sun and Intel CEO's. However, the two companies have scheduled an upcoming joint conference in San Francisco that many believe will signal the public announcement of their alliance.

The expected deal marks a major victory in the design department for Intel. The company, known within the technological community as the "world's largest computer chip maker", has been struggling to reverse plunging profits and regain the market share lost to archrival company Advanced Micro Devices Inc (AMD). (Source: usatoday.com)

The partnership can also be considered a tremendous victory for Sun Microsystems. The company hopes to continue an arduous journey back to profitability following a recent collapse in sales. Sun also hopes that the partnership with Intel will make their servers and software products more appealing to the average consumer.

The deal comes amid an escalating battle for market share between Intel and AMD.

Both Intel and AMD have continued to slash prices and incur heavy losses to transition a more advanced manufacturing technology that will eventually allow them to shrink the size of the circuitry on their chips. (Source: latimes.com)

The fight for market share has been especially painful for Intel, whose computer chips have been heavily criticized for their high energy consumption.

In 2006 alone, Intel lost more than 5% of the overall computer chip market to AMD. Intel also suffered a crushing blow when Dell Inc., a company that had been synonymous with Intel computer chips for a number of years, announced plans to use AMD chips in their personal computers and servers. (Source: latimes.com)

When AMD revealed that their focus for the future was on energy-efficient computer chips, the company successfully lured away many clients that had previously been loyal to Intel.

However, Intel still commands roughly three quarters of the overall chip market. Last year, Intel struck a major blow to AMD by unveiling a new line of chips based on an upgraded design. Industry observers praised the new line of chips for delivering high performance while dissipating less heat than in previous chip models. (Source: usatoday.com)