The Cutting Edge: COMPUTING / TECHNOLOGY / INNOVATION : Standardization of PC Industry Shifts Focus From Engineering : Computers: Intel’s motherboard will further move attention toward packaging and marketing.

“With the way things are going, Federal Express could become the biggest computer company in the world,” groused Apple Computer Inc. Chief Executive Michael Spindler at a recent meeting with reporters at the company’s Cupertino, Calif., headquarters.

Spindler was referring to the gradual transformation of the PC business from an industry of technology inventors into one of technology packagers. Driving that change has been the standardization of the personal computer: Nearly 80% of all PCs run Microsoft software and almost all of those machines are powered by Intel microprocessors.

And now Intel is giving personal computer makers another building block. It’s called the motherboard, and it houses not only the microprocessor, but also the chips that control peripherals, such as the disk drive, the monitor and the printer.

“If the microprocessor is the engine, the motherboard is the rest of the car,” explains Martin Reynolds, an analyst with San Jose market research firm Dataquest Inc. “By designing the engine and the rest of the car at the same time, Intel is compressing the time it takes for PCs to come to market.”

And they are lowering the barrier to market entry. “Gateway couldn’t survive without Intel motherboards,” Reynolds says of the North Sioux City, S.D., PC maker that was started in founder Ted Waitt’s family’s barn.

With the widespread availability of standard components, there is little science in designing a PC today. Buying a motherboard from Intel--rather than designing one from scratch--can cut product development by more than half, to about six months, said Bob Stearns, vice president of corporate development for Compaq Computer Corp.

And thus success in the PC business these days is more often than not the result of clever marketing rather than engineering. Dell Computer popularized selling PCs via mail-order. Packard Bell was among the first to sell PCs through discount stores like Wal-Mart, rather than specialized computer retailers. Both methods allowed these upstarts to sell for prices lower than the industry average.

The release of Windows 95 on Aug. 24 is likely to strengthen the grip of Intel and Microsoft on the PC industry, and thus accelerate the trend toward greater standardization. And Intel appears determined to take charge of a greater portion of the innards of a computer--despite the complaints raised by some of its biggest PC customers.

Industry standards have in many ways been good for consumers, enabling powerful technology to be delivered at relatively inexpensive prices. Today’s PCs offer the data-processing power of giant mainframe computers of yesterday.

But it has created a harshly competitive environment for PC hardware manufacturers. Upstarts with hardly an engineer on staff can afford to sell their machines at rock-bottom prices.

“If they buy motherboards from Intel, they can just screw them into the chassis and ship them out,” Dataquest’s Reynolds said.

That makes it hard for others to spend any money on research and development and still remain competitive--which could hurt everyone in the long run. For Apple, which must invest in its own proprietary technology, that pressure is particularly acute.

Intel, meanwhile, has been reaping immense profits and investing ever-more heavily to solidify its lead. The company is even moving again toward building PCs itself--as it has done in the past--agreeing on Tuesday to make PCs for Toshiba Corp.

But Intel disputes the notion that the PC has become a commodity. IBM and Compaq, for example, are spending generously to design, respectively, the IBM Thinkpad--a portable computer that has become a best-seller because of its sleek design--and the Compaq Presario, a multimedia PC for novice computer users.

“There is still plenty of room for innovation,” Intel Vice President Paul Otellini said. “Standardization just means there is a base level of capabilities that it doesn’t make any sense to spend resources to duplicate. Consumer won’t pay nickel more if it’s same ol’, same ol’.”