Intel has finally launched its dual-core Itanium chip, Montecito, nine months later than planned.

The dual-core Itanium 2 design is the first to bring hyperthreading, virtualisation and multiple cores to the Itanium line and represents Intel's attempt to improve on its third-place position in the high-end server market. Competing with high-end Unix boxes, it's aimed at companies that deal with business analytics, large data warehouses and other high-performance computing tasks.

The chip requires 20 per cent less power and provides double the performance of the last generation Itanium chip, said David Myron, Itanium product line manager. "You usually get a 50 to 70 percent improvement when you go to dual core, but this has double the performance," he said. An Intel spokesman also explained that the delay in releasing Montecito was down to processor design rather than manufacturing issues.

The launch is important for Intel, which announced layoffs last week and sold off its XScale processor line in June, in attempts to recover from slumping profits. The company said that Itanium 2-based servers would ship from HP, Unisys, Fujitsu Siemens, and the ailing SGI, although Itanium co-developer HP remains the mainstay of the Itanium OEMs, with 80 per cent of the market.

Intel compared the Itanium to competition from Sun and IBM, saying that in terms of market share growth, it's catching the Sparc and Power chips, and has overtaken them in Japan, where local Itanium vendors Hitachi and Fujitsu Siemens dominate. But then, products with the smallest market shares tend to enjoy the biggest growth when expressed in percentage terms.

According to Intel, there are now 8,000 Itanium applications and rising - and they're not just company-specific vertical applications either, according to Intel. This follows the institution of Intel's September 2005 initiative, the Itanium Alliance, which has $10 billion available to it to spend on the development of new software and on marketing. It includes most of the Itanium vendors, such as HP, Hitachi, Fujitsu, NEC, Unisys, Bull and Silicon Graphics on the hardware front, software developers Microsoft, Oracle, Red Hat, Novell, BEA Systems, SAP and SAS, plus Intel of course.

Intel launched five versions of the dual-core Itanium 2, including a 1.6GHz version with 24MB of memory for $3,692; with 18MB for $1,980; and with 8MB for $1,552. A 1.42GHz version with 12MB memory will cost $910 and a 1.4GHz version with 12MB, $749.