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 1.5 GHz P4 was reduced 21 percent to $ 644 while the 1.4 GHz and 1.3 GHz models fell 23 percent and 13 percent respectively.

Even bigger cuts were implemented on the Pentium III line where a 1 GHz PIII now costs $ 268, down 42 percent from $ 465. The 933 MHz PIII got a 31 percent cut to $ 241 from $ 348. The 866 MHz and 850 MHz versions were lowered by 20 percent to $ 193 from $ 241. Intel also cut the price of its top Xeon chips for servers by 17 percent.

Intel hopes to both increase overall demand and force a market shift towards the P4 class of chips. The company's goal 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," said Mike Sullivan, Spokesman, Intel.

Intel also announced it has begun selling a new low-power 500 MHz PIII for use in laptops. 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 (AMD) 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 (Mobile-chip Group), Intel. He said that Intel plans to have 1 GHz laptop processors available later this year.

Meanwhile, IBM announced that 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.