Intel announces deep price cuts in Pentium lines

In a move to stimulate demand for its new Pentium 4 chips, Intel has

announced drastic price cuts on the chips. The price of the 1.5GHz P4 was

reduced 21 per cent to $644 while the 1.4GHz fell 23 per cent.

Even bigger cuts were implemented on the Pentium III line where a 1-gigahertz

Pentium III now costs $268, down 42 per cent from $465. The 933-megahertz

Pentium III got a 31 per cent cut to $241 from $348. The 866MHz and 850MHz

versions were lowered 20 per cent to $193 from $241. Intel also cut the price of

its top Xeon chips for servers by 17 per cent. The company hopes to both

increase overall demand and force a market shift towards the P4 class of chips.

Intel’s goals for 2001 is to end up shipping more P4s than PIIIs on a monthly

basis.

"Price is one of the tactics that we can use to help make Pentium 4

available in a broader segment of the market," Intel spokesman Mike

Sullivan said. Intel also announced it has begun selling a new low-power 500 MHz

Pentium III for use in laptop. The $208 chip uses just half a watt of power,

compared with about two watts for conventional chips.

Intel competes with Transmeta for the laptop processor market where low power

consumption coupled with high performance are driving purchase criteria.

Advanced Micro Devices is also ready to join the market for very low power

consuming Duron processors.

For now, Intel appears to have gained the bragging rights. "We will

absolutely provide performance leadership and power leadership in every one of

the market segments,'' said Frank Spindler, manager of Intel's mobile-chip

group.

Spindler said Intel plans to have 1GHz laptop processors available later this

year. IBM announced it will use the new Pentium in an ultra-light ThinkPad

notebook that is an inch thick, and its batteries last about five hours, Intel

said.