Intel trims prices on desktop PC chips

Intel Corp. has shaved a few dollars off the prices of its microprocessor chips for desktop computers as part of a broader effort to accelerate the adoption of its recently launched Pentium 4 chip.

The cuts, which Intel said are part of its normal pricing activity, are deepest on its Celeron processors, aimed at budget PCs priced below about $1,000. The chip giant also cut Pentium 3 prices by as much as 11% and prices for its Pentium 4 chip by as much as 4%. The new prices took effect Sunday.

"We're really ramping pretty aggressively with the Pentium 4 and trying to move into all mainstream price points throughout [the first quarter]," said Intel spokesman Seth Walker. "To do that, we have to adjust pricing across our entire product line."

Intel said it hopes Pentium 4 systems will be available for as little as $1,500 from all major U.S. PC makers by the end of this month. Taking into account promotional and rebate offers, systems at that price are already available from Dell Computer Corp., Compaq Computer Corp., Hewlett-Packard Co. and Gateway Inc., Walker said.

While the price reductions on the Pentium 4 are relatively small, this is the second time this year that Intel has cut prices on that product. The vendor hopes to reach the "crossover point" between Pentium 3 and Pentium 4 -- when it sells more Pentium 4s than Pentium 3s -- by early next year, Walker said.

Intel's 800-MHz Celeron processor is now priced at $112, a drop of 19%, according to figures published on Intel's Web site. Among other reductions, the price of the 766-MHz Celeron was cut by 8% to $103, while the 733-MHz version fell 6% to $83, Intel said.

The 1-GHz Pentium 3 processor is now priced at $241, a drop of 10%. Intel shaved 7% off the price of a 933-MHz Pentium 3, making it $225, while the 800-MHz version dropped 11% to $163.

Price cuts on Intel's newest desktop chip, the Pentium 4, were more shallow. The chip-making giant cut 1% from the price of its 1.5-GHz and 1.3-GHz Pentium 4 chips, putting them at $637 and $332, respectively. The price of the 1.4-GHz part was cut by 4%, to $423, Intel said.

All prices are for processors bought in 1,000-unit quantities.

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