Intel confirms desktop chip price cuts

Intel Corp. has cut the prices of its Celeron and Pentium 4 desktop processors in advance of the expected launch this week of a new 3.06-GHz Pentium 4 processor, the company confirmed yesterday.

A research note from investment bank Merrill Lynch & Co., released ahead of Intel's official announcement, offered a preview of the news and noted that competitor Advanced Micro Devices Inc. is expected to follow suit.

The approximate price of the new processor, Intel's first on the desktop to feature its hyperthreading technology, will be in the mid-$500 range, according to Merrill.

To bring slower processors in line with the new chip, the 2.8-GHz Pentium 4 will fall in price from $508 to $401, and the 2.67- and 2.6-GHz Pentium 4 processors will decline from $401 to $305, according to Intel's Web site. All prices are in 1,000-unit quantities.

Intel will also cut prices on its budget line of Celeron desktop processors. The 2-GHz Celeron will fall from $103 to $83, the 1.8-GHz from $83 to $69, the 1.7-GHz from $69 to $54 and the 1.4-GHz from $74 to $54, Intel said.

Prices for its families of mobile, server and workstation chips were unchanged, according to Intel.

Chip manufacturers typically cut prices when a new, higher-performing chip enters the market to align their product lines around the premium some users are willing to pay for the highest-performing processor. The prices of AMD's lower-end Athlon XP processors will also be cut sometime soon, specifically the Athlon XP 2100+, 1900+ and 1700+, according to Merrill.

AMD hadn't updated its price list available on the Web as of yesterday, and a representative for AMD wasn't immediately available for comment.

Copyright © 2002 IDG Communications, Inc.

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