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Intel starts price war with 1.7 GHz Pentium 4

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CIOL Bureau
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Intel appears to have fired a powerful first blast in a new price-performance war with arch rival Advanced Micro devices as the Santa Clara-chipmaker introduced a new 1.7 GHz Pentium 4 processors that will sell for just $352 in volume.



Intel said the aggressive price for the leading-edge chip is the result of moving production to new 1.8-micron levels. As a measure of the intensity of Intel’s aggressive pricing strategy, last July the firm introduced a 1.1 GHz P-III chip at a $990 price level.



Slower 1.5 GHz Pentium 4 chips will sell for just $256, down from $637 when the chip was launched last November. The 1.3 GHz version will cost $193. Analysts agreed Intel is desperately trying to reverse a troubling trend.



After controlling better than 90% of the desktop processor market for much of the 1990s, Intel’s share has dropped to 77.3 per cent in the first quarter a sharp drop from 81.5 per cent in the fourth quarter. AMD’s share has grown to 21.1 per cent.



Clearly, the pressure is back on AMD, whose fastest processor is running at 1.33 GHz and selling at $319. And though AMD spokesman John Greenagel said the pricing would not change, analysts expect AMD to soon match the Intel performance jump.

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