Pentium 4 prices to be slashed across the board

Intel will cut the prices of its Pentium 4 processors by an average of 26 per cent by September 1, six weeks earlier than expected, according to a research note from Salomon Smith Barney Holdings. Meanwhile, the chip maker confirmed the product roadmap has been accelerated for upcoming Pentium 4 chips.

The price of higher-end processors will be cut earlier to coincide with the launch of the 2.8GHz Pentium 4 on August 25, said Jonathan Joseph, an analyst at SSB. An Intel spokesman said that the release of the chip will occur in the third quarter, declining to confirm the August 25 date.

Intel's 3.0GHz Pentium 4 processor will also be released ahead of schedule, in time for PC manufacturers to include the chip in their fourth-quarter holiday season products, said George Alfs, a spokesman for Intel. "Our manufacturing execution continues to be excellent, and we're very pleased the 3.0 processor will be available for the holiday selling season," Alfs said.

The early 2.8GHz launch might signal that Intel is concerned about demand for its chips in September, an important buying period for chip makers, Joseph said. The 2.8GHz Pentium 4 had been scheduled to appear in the fourth quarter of this year.

The fastest current chip in the Pentium 4 line-up, the 2.53GHz processor, will have its price reduced 63 per cent, while the low-end 1.8GHz processor will get a 13 per cent price cut, he said.

Joseph attributed the price cuts to Intel's desire to stimulate demand for its chips heading into the holiday buying season, one of the most lucrative segments of the year for Intel and its rivals.

Intel's policy is not to comment on formal price changes, Alfs said. He also confirmed that Intel will release a 2.2GHz Pentium 4-M processor for notebook computers later this year.

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